Adams Stirling PLC

Simon v. Buttercreek II Homeowners Association, Inc.

United States District Court, C.D. California, Western Division
(November 09, 2022) UNPUBLISHED

Attorneys and Law Firms
Barry J. Reagan, Erick Cadena, Slaughter Reagan and Cole LLP, Ventura, CA, for Defendant Buttercreek II Homeowners Association Inc.
Niki-Alexander Shetty, Woodland Hills, CA, Pro Se.
Barry J. Reagan, Slaughter Reagan and Cole LLP, Ventura, CA, for Defendant SBS Lien Services.


Terry J. Hatter, Jr., Senior United States District Judge

*1 The Court has considered Defendant Niki-Alexander Shetty’s motion to dismiss [dkt # 18], along with the moving and opposing papers.
The following facts are as alleged in the complaint.
On August 28, 1998, Plaintiff Laura A. Simon [“Simon”] and her husband, Patrick Simon, purchased a single family residence at 12406 Spring Creek Road, Moorpark, California 923021 [“the Property”]. The Property is subject to the covenants, conditions and restrictions of Defendant Buttercreek II Homeowners Association [“Buttercreek”].
On or about February 8, 2006, the Simons obtained a mortgage on the Property for $548,000.00, which was, subsequently, assigned to Defendant JPMorgan Chase Bank, N.A. [“Chase”].
On September 14, 2016, Defendant S.B.S. Lien Services, d.b.a. S.B.S. Trust Deed Network [“S.B.S.”], as agent for Buttercreek, recorded a Notice of Default against the Property for unpaid homeowner assessments and interest.
On July 11, 2018, Patrick Simon executed a quitclaim deed conveying his interest in the Property to Simon.
On March 27, 2019, S.B.S. recorded a Notice of Trustee Sale in the amount of $17,498.00, in relation to the unpaid assessments and interest. At some point in August, 2019 – the complaint is contradictory on dates – Buttercreek recorded a Trustee’s Deed Upon Sale. Thereafter, on October 9, 2019, Buttercreek sold the Property to Defendant First American Properties and Acquisitions, Inc. [“First American”] for $5,000.00. First American’s purchase was subject to the Chase mortgage. On October 31, 2019, First American evicted Simon.
Allegedly, when Buttercreek contacted Simon to collect the unpaid assessments, it threatened to take Simon’s home if she did not pay the assessments, and it failed to disclose that it was a debt collector attempting to collect a debt.
On March 10, 2021, Simon filed this action against Buttercreek, First American, Shetty, Chase, and S.B.S., asserting claims for: (1) Violation of the Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. [“FDCPA”], against Buttercreek and S.B.S.; (2) Quiet title, against First American; (3) Cancellation of written instrument, against S.B.S.; (4) Violation of California’s unfair competition law,  Cal. Bus. and Prof. Code § 17200, et seq., against all Defendants; (5) Violations of the Davis-Stirling Act, including  Civil Code §§ 1357.130(b) and  1363.09(b), against Buttercreek and S.B.S.; (6) Intentional infliction of mental and physical distress, against all Defendants; (7) Retaliatory eviction, against First American and Shetty; (8) Negligence, against Buttercreek and S.B.S.; and (9) Declaratory judgment under Fed. R. Civ. P. 57, against all defendants. As to the Davis-Sterling Act claim, the California legislature repealed  Civil Code §§ 1357.130(b) and  1363.09(b), effective January 1, 2014, pursuant to its reorganization of the Act in 2012.
On June 17, 2021, Buttercreek and S.B.S. filed a joint answer. On October 15, 2021, Simon dismissed her claims against Chase. First American has not responded.
*2 Shetty, now, moves, in pro per, to dismiss the FDCPA, declaratory judgment, quiet title, and retaliatory eviction claims pursuant to Fed. R. Civ. P. 12(b)(1), for lack of subject matter jurisdiction, and Fed. R. Civ. P. 12(b)(6), for failure to state a claim. Shetty filed his motion on behalf of himself and First American, asserting that he is an officer of First American. However, Shetty cannot represent First American, here, because he is not an attorney. See  D-Beam Ltd. P’ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973–74 (9th Cir. 2004).

Motion to Dismiss for Lack of Subject Matter Jurisdiction

Simon’s FDCPA claim is the basis for the Court’s federal question jurisdiction over this action. See 28 U.S.C. § 1331. As discussed below, Simon’s other federal law claim, based on the Declaratory Judgment Act, cannot, on its own, confer federal question jurisdiction. See California Shock Trauma Air Rescue v. State Comp. Ins. Fund, 636 F.3d 538, 543 (9th Cir. 2011).
In his motion, Shetty attacked the FDCPA claim on three grounds: (1) It is barred by the statute of limitations; (2) Simon failed to allege sufficient facts to state a claim; and (3) It is immaterial and frivolous, and was asserted solely for the purpose of obtaining subject matter jurisdiction. The first ground is limited to a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). See  Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F3d 954, 969 (9th Cir. 2010). The same is true for the second ground. See  Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 574 (9th Cir. 2004). Because Simon’s FDCPA claim was not asserted against Shetty, but against only Buttercreek and S.B.S., Shetty lacks standing to challenge it under Rule 12(b)(6). See  Mantin v. Broad. Music, Inc., 248 F.2d 530, 531 (9th Cir. 1957).
However, the Court is obligated to dismiss a case if it lacks subject matter jurisdiction. See Fed. R. Civ. P. 12(h)(3). The Court must dismiss an action where the alleged federal claim clearly appears to be immaterial and made solely for the purpose of obtaining federal jurisdiction, or where the claim is wholly insubstantial and frivolous.  Bell v. Hood, 327 U.S. 678 (1946). Thus, the Court can, properly, consider Shetty’s third argument.
Simon, as the plaintiff, bears the burden of proving that the Court has subject matter jurisdiction over her case. See  Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986).
A jurisdictional attack under Fed. R. Civ. P. 12(b)(1) may be facial, relying on the face of the pleadings, or factual, relying on the pleadings as well as extrinsic evidence.  Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). Where the attack is facial, as it is here, the Court must accept the allegations in the complaint as true.  Whisnant v. United States, 400 F.3d 1177, 1179 (9th Cir. 2005).
Generally, “[a]ny non-frivolous assertion of a federal claim suffices to establish federal question jurisdiction.”  Churchill, 361 F.3d at 574. “The standard for establishing federal jurisdiction is even less stringent than that required to state a claim under Fed. R. Civ. P. 12(b)(6).”  Churchill, 361 F.3d at 574. That is, a claim may survive a jurisdictional challenge yet fail to state a claim.  Churchill, 361 F.3d at 574. The Ninth Circuit, in Churchill, did not define frivolous, but it did conclude that the alleged federal claim was not untenable because, in part, it conformed to the governing statute. See  Churchill, 361 F.3d at 575. The Court could not find any other Ninth Circuit case which defined frivolous in the context of federal question jurisdiction.
*3 However, in ruling on whether to subject an attorney to sanctions under Fed. R. Civ. P. 11 for filing a frivolous complaint, the Ninth Circuit stated that it “use[s] the word frivolous to denote a filing that is both baseless and made without a reasonable and competent inquiry.”  Holgate v. Baldwin, 425 F.3d 671, 676 (9th Cir. 2005). In Holgate, the Circuit concluded that a claim was baseless because the Plaintiffs had failed to allege even the most basic facts necessary for their claim, and had based the claim on a legal theory that the Supreme Court has specifically foreclosed.  Holgate, 425 F.3d at 676.
Here, Simon’s FDCPA claim conforms enough to the less-stringent Bell standard to be non-frivolous. See  Churchill, 361 F.3d at 575. She alleged the most basic facts of her FDCPA claim, alleging that Buttercreek had violated a specific provision of the statute and describing what Buttercreek had done to violate it. Unlike in Holgate, the entire basis of her claim is not clearly foreclosed by controlling precedent. Therefore, because the claim is not frivolous, it cannot be dismissed on jurisdictional grounds.

Failure to State a Claim

The Court may dismiss a claim, sua sponte, based on the statute of limitations if the defendant has not waived its statute of limitations defense and if the plaintiff had the opportunity to present arguments regarding the statute of limitations.   Levald, Inc. v. City of Palm Desert, 998 F.2d 680, 687 (9th Cir. 1993). Here, Buttercreek and S.B.S. raised the defense in their joint answer, so it was not waived. See In re Cellular 101, Inc., 539 F.3d 1150, 1155 (9th Cir. 2008). Further, Simon had the opportunity, in her opposition brief to the instant motion, to respond to Shetty’s statute of limitations attack raised in his motion to dismiss. Indeed, Simon acknowledged, in her brief, that Shetty had raised the statute of limitations defense in his motion, though she made no arguments regarding that defense. Consequently, the Court may, now, consider, sua sponte, whether to dismiss the FDCPA claim based on the statute of limitations. The Court has not considered any other grounds by which Simon’s complaint might fail under Fed. R. Civ. P. 12(b)(6).
Pursuant to  15 U.S.C. § 1692k(d), FDCPA claims have a one year statute of limitations, starting from the date each alleged violation occurred. See  Rotkiske v. Klemm, 140 S. Ct. 355, 360 (2019). While reviewing Simon’s complaint at this procedural juncture, the Court must accept all of the allegations in the complaint as true, and draw all reasonable inferences in Simon’s favor. See  Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Thus, Simon’s FDCPA claim may be dismissed where “the running of the statute [of limitations] is apparent on the face of the complaint.” See  Von Saher, 592 F.3d at 969.
Simon filed this action on March 10, 2021. Therefore, any alleged FDCPA violations that occurred prior to March 10, 2020, are barred by the one year statute of limitations. See  15 U.S.C. § 1692k(d). Here, Simon alleged that all actions taken by Buttercreek and S.B.S. – with one exception – occurred in 2019. The one exception was that she did not set forth the date that Buttercreek, allegedly, contacted Simon to collect the debt and, in the process, committed multiple violations of the FDCPA. However, it would be unreasonable for the Court to infer that the contact without an alleged date occurred after Buttercreek sold the Property in October, 2019. See  Iqbal, 556 U.S. at 678. Accordingly, it is clear from the face of Simon’s complaint that the statute of limitations bars her FDCPA claim. See Von Saher.
*4 A claim cannot be dismissed with prejudice “unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim.” Von Saher. Consequently, because there may be a set of facts that would allow Simon to successfully allege her FDCPA claim, the Court will not dismiss it with prejudice.

Declaratory Judgment Act Claim

Pursuant to the Declaratory Judgment Act, the Court may “declare the rights and other legal relations of any interested party seeking such declaration,” on an issue arising from a justiciable case or controversy.  28 U.S.C. § 2201(a). A declaratory judgment claim typically involves a plaintiff seeking a preemptive declaration on the merits of a threatened “coercive claim” that she expects a defendant to file against her.  Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Tr. for S. California, 463 U.S. 1, 19 (1983). A declaratory judgment claim is not sufficient, on its own, to establish federal question jurisdiction; rather, the threatened “coercive claim” must “necessarily present a federal question.” Franchise Tax Bd.
Simon alleged that she brought Declaratory Judgment Act claim “on the basis of the conduct by the DEFENDANTS in violation of the United States Constitution”; that a declaratory judgment “will terminate the controversy whether the due process rights of the Plaintiff were violated by the DEFENDANTS”; and that she brought the case for “declaratory relief for all published statements not protected by the First Amendment.”
The question, then, is whether those allegations stated a coercive federal claim over which the Court necessarily has subject matter jurisdiction. See  Franchise Tax Bd., 463 U.S. at 19. If so, the Court would retain federal question jurisdiction. After a thorough review of Simon’s Declaratory Judgment Act claim, the Court was unable to identify a constitutional context for Simon’s allegations. The claim was based on vague legal conclusions that were couched as factual allegations that were untethered and unrelated to anything else in the complaint, making it impossible for the Court to identify a potential justiciable constitutional controversy. See  Iqbal, 556 U.S. at 678;  28 U.S.C. § 2201(a). Therefore, Simon’s Declaratory Judgment Act claim failed to set forth a cognizable federal coercive claim.
Consequently, the Court cannot exercise federal question jurisdiction on the basis of Simon’s Declaratory Judgment Act claim.

Simon’s Remaining Claims

Because, at this point, only state law claims remain, the Court has the discretion to exercise, or not, supplemental jurisdiction over those remaining claims.  Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009). Here, the Court declines to exercise supplemental jurisdiction.
It is Ordered that this case be, and hereby is, Dismissed without prejudice.

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