Arau v. Rocket Mortgage, LLC

• Court: District Court, N.D. California
• Decided: June 26, 2023
• Docket: 3:22-cv-07715
• Status: Unknown

Opinion

1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 5 JOSE ARAU, Case No. 22-cv-07715-JSC

6 Plaintiff, ORDER RE: MOTIONS TO DISMISS v. 7 Re: Dkt. No. 32 8 ROCKET MORTAGAGE, LLC, et al., Defendants. 9

10 11 Plaintiff, proceeding without the assistance of a lawyer, filed this action against Treasury 12 Secretary Janet Yellen and other employees of the United States Treasury, Rocket Mortgage, LLC 13 (his original mortgage lender), Mortgage Electronic Registration Systems, Inc., Lakeview 14 Servicing (the current servicer of Plaintiff’s mortgage), and Frank La Salla, for Quiet Title, an 15 Accounting, and a “Restraint of Trade” with respect to the mortgage loan on Plaintiff’s property in 16 Berkeley, California. After carefully considering the arguments and briefing submitted, the Court 17 concludes oral argument is unnecessary, see Civ. L.R. 7-1(b), and GRANTS Defendants’ motions 18 to dismiss. 19 BACKGROUND 20 Plaintiff’s complaint is difficult to understand. Plaintiff seems to allege he discharged his 21 mortgage debt by sending bonds to the Depository Trust and Clearing Corporation in New York. 22 DTCC, he alleges, was “supposed to send them (funds) to the U.S. Treasury for further payment to 23 the ‘Holder’ of the debt.” (Dkt. No. 12 at 2.)1 The “bond” Plaintiff references is a series of 24 incomprehensible documents with quasi-legal terminology. (See Dkt. No. 45.) As best the Court 25 can tell, Plaintiff points to his birth certificate, claims he discharged that document to the Treasury, 26 which (he claims) was supposed to pass funds to satisfy his mortgage debt. (Id.) 27 1 DISCUSSION 2 I. Legal Standard 3 Rule 8(a) requires a plaintiff to plead “enough facts to state a claim to relief that is 4 plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has 5 facial plausibility when the plaintiff pleads factual content that allows the court to draw the 6 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 7 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it 8 asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (cleaned up). For 9 purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the 10 complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving 11 party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 12 Moreover, when a plaintiff proceeds without representation by a lawyer, the Court must “construe 13 the pleadings liberally . . . to afford the petitioner the benefit of any doubt.” Hebbe v. Pliler, 627 14 F.3d 338, 342 (9th Cir. 2010) (cleaned up). 15 But the Court need not accept as true allegations contradicted by judicially noticeable facts, 16 see Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and it “may look beyond the 17 plaintiff’s complaint to matters of public record” without converting the Rule 12(b)(6) motion into 18 a motion for summary judgment. Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor 19 must the Court “assume the truth of legal conclusions merely because they are cast in the form of 20 factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011). Mere “conclusory 21 allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” 22 Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004). 23 “Determining whether a complaint states a plausible claim for relief is ‘a context-specific 24 task that requires the reviewing court to draw on its judicial experience and common sense.’” 25 Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th Cir. 2016) (quoting Iqbal, 556 U.S. at 679). 26 “[D]ismissal may be based on either a lack of a cognizable legal theory or the absence of sufficient 27 facts alleged under a cognizable legal theory.” Johnson v. Riverside Healthcare Sys., 534 F.3d 1 II. Motions to Dismiss 2 Plaintiff’s legal theory stems from some version of a redemption scam. See United States 3 v. Weldon, No. 1:08-CV-01643-LJO-SMS, 2010 WL 1797529, at *3 (E.D. Cal. May 4, 2010) 4 (describing the history of redemption scams).2 In other words, Plaintiff’s claims stems from the 5 notion that one can redeem bonds from the government by filing certain forms or securing an 6 instrument with one’s birth certificate. Courts characterize the redemption theory as 7 “implausible,” “clearly nonsense,” “convoluted,” and “peculiar.” Id. (citing Bryant v. Washington 8 Mutual Bank, 524 F.Supp.2d 753, 760 (W.D.Va.2007), aff’d, 282 Fed.Appx. 260 (4th Cir. 2008); 9 United States v. Allison, 264 Fed.Appx. 450, 452 (5th Cir. 2008)). 10 The Court agrees with those cited authorities and finds Plaintiff’s theory lacks any legal 11 foundation. Because this redemption misconception underlies Plaintiff’s claims, Plaintiff’s 12 complaint fails to state a claim upon which relief can be granted. Johnson, 534 F.3d at 1121. For 13 example, a party cannot “quiet title without discharging h[is] debt. The cloud upon h[is] title 14 persists until the debt is paid.” Aguilar v. Bocci, 39 Cal.App.3d 475, 477 (1974). Similarly, an 15 accounting claim requires “some balance is due [to] the plaintiff that can only be ascertained by an 16 accounting.” Teselle v. McLoughlin, 173 Cal. App. 4th 156, 179, 92 Cal. Rptr. 3d 696, 715 17 (2009). But because the quiet title and accounting claims rely on the redemption theory, Plaintiff 18 fails to state facts sufficient to state a claim his debt was discharged, or that an amount is due to 19 him. 20 Finally, to the extent Plaintiff alleges Defendants engaged in a “restraint of trade” in 21 violation of federal antitrust laws, that claim also fails. To state a claim under the Sherman Act, 22 Plaintiff must allege: “(1) an agreement or conspiracy among two or more persons or distinct 23 business entities; (2) by which the persons or entities intended to harm or restrain competition; and 24 (3) which actually injures competition.” Kendall v. Visa U.S.A. Inc., 2005 WL 2216941, at *2 25 (N.D. Cal. Jul. 25, 2005), aff’d, 518 F.3d 1042 (9th Cir. 2008) (citation omitted). Plaintiff 26 provides no facts supporting any relationship among Defendants. 27 1 || I. Leave to Amend 2 Before dismissing a civil complaint filed by a litigant without the assistance of counsel, the 3 || plaintiff should be given “notice of the deficiencies in his or her complaint” and be provided “an 4 || opportunity to amend the complaint to overcome deficiencies unless it is clear [the deficiencies] 5 cannot be cured by amendment.” Eldridge v. Block, 832 F.2d 1132, 1135-36 (9th Cir. 1987). 6 To the extent Plaintiff attempts to plead claims based on a redemption theory, any 7 amended complaint would be futile. See Cato v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995). 8 || Thus, Plaintiff's redemption theory-based claims are dismissed without leave to amend.* 9 CONCLUSION 10 The Court interprets Plaintiff's complaint as bringing redemption-theory based claims. For 11 the reasons stated above, Plaintiff's claims are dismissed without leave to amend any redemption- 12 || based claims. To the extent Plaintiff believes he can amend the complaint to state claims based on 13 a different, but viable, theory, he must file his amended complaint by July 17, 2023. Failure to 14 || file an amended complaint by that deadline will result in judgment being entered against Plaintiff 3 15 on the complaint. The hearing scheduled for July 6, 2023 is VACATED. a 16 IT IS SO ORDERED. 3 17 This Order resolves Dkt. Nos. 16, 32, 57, 62. 18 || Dated: June 26, 2023 19 20 Pests Satrly. JAQQUELINE SCOTT CORLE 21 United States District Judge 22 23 24 25 26 27 28 3 Plaintiff also filed an “Order to Show Cause Why Quiet Title Should Not Issue.” (Dkt. No. 16.) That motion is DENIED for the reasons stated above.