Edwards v. Rocky Galgano

Opinion

1 2 3 4 5 6 9 10 KENNETH G. EDWARDS, Case No.: 23-CV-291 JLS (MSB)

11 Plaintiff, ORDER: (1) GRANTING MOTION 12 v. TO PROCEED IN FORMA PAUPERIS; (2) DENYING AS MOOT 13 ROCKY GALGANO and THE STAR MOTION TO VACATE; AND MANAGEMENT COMPANY, 14 (3) DISMISSING WITHOUT Defendants. PREJUDICE COMPLAINT FOR 15 FAILURE TO STATE A CLAIM 16 PURSUANT TO 28 U.S.C. § 1915(e)(2)

17 (ECF Nos. 1, 6 & 7) 18

19 Presently before the Court are Plaintiff Kenneth G. Edwards’s Complaint (“Compl.,” 20 ECF No. 1), Motion to Proceed in Forma Pauperis (“IFP”) (“IFP Mot.,” ECF No. 7), and 21 Motion to Vacate Dismissal Order and Accept Plaintiff’s Correct Motion to Proceed 22 Without Prepayment of Fees and Costs (“Mot. to Vacate,” ECF No. 6). Having considered 23 Plaintiff’s Complaint, his IFP Motion, and the applicable law, the Court GRANTS 24 Plaintiff’s IFP Motion, DENIES AS MOOT Plaintiff’s Motion to Vacate, and 25 DISMISSES WITHOUT PREJUDICE Plaintiff’s Complaint, pursuant to 28 U.S.C. 26 § 1915(e)(2), for failure to state a claim. 27 / / / 28 / / / 2 Plaintiff initiated this action on February 14, 2023, when he filed his Complaint and 3 his initial IFP Motion. See Compl.; ECF No. 2. On February 28, 2023, the Court found 4 Plaintiff’s initial IFP Motion defective and denied it without prejudice, granting Plaintiff 5 thirty days in which to either pay the filing fees or file an IFP Motion that cured the defects 6 of the original. See ECF No. 4. At that time, the Court also dismissed without prejudice 7 the Complaint for failure to pay the filing fees. 8 On March 20, 2023, Plaintiff timely filed the instant IFP Motion. See IFP Mot. He 9 also filed a Motion to Vacate, asking the Court to accept his IFP Motion and vacate the 10 February 28, 2023 dismissal order. See Mot. to Vacate. 12 All parties instituting any civil action, suit, or proceeding in a district court of the 13 United States, except an application for writ of habeas corpus, must pay a filing fee of 14 $402.1 See 28 U.S.C. § 1914(a). An action may proceed despite a plaintiff’s failure to 15 prepay the entire fee only if he is granted leave to proceed IFP pursuant to 28 U.S.C. 16 § 1915(a). See Andrews v. Cervantes, 493 F.3d 1047, 1051 (9th Cir. 2007); Rodriguez v. 17 Cook, 169 F.3d 1176, 1177 (9th Cir. 1999). Although the statute does not specify the 18 qualifications for proceeding IFP, the plaintiff’s affidavit must allege poverty with some 19 particularity. Escobeda v. Applebees, 787 F.3d 1226, 1234 (2015). Granting a plaintiff 20 leave to proceed IFP may be proper, for example, when the affidavit demonstrates that 21 paying court costs will result in a plaintiff’s inability to afford the “necessities of life.” Id. 22 The affidavit, however, need not demonstrate that the plaintiff is destitute. Id. 23 Here, Plaintiff indicates that he receives $1,970.00 per month in disability payments. 24 IFP Mot. ¶ 1. He has not been employed during the past two years. Id. ¶ 2. He has $0 in 25

26 1 In addition to the $350 statutory fee, civil litigants must pay an additional administrative fee of $52. 27 See 28 U.S.C. § 1914(a) (Judicial Conference Schedule of Fees, District Court Misc. Fee Schedule, § 14 28 (eff. Dec. 1, 2020)). The additional $52 administrative fee does not apply to persons granted leave to 1 cash and $2.13 on a prepaid debit card. Id. ¶ 4. Plaintiff owns no assets of value. Id. ¶ 5. 2 Plaintiff’s estimated monthly expenses total $1,956.00. Id. ¶ 8. Plaintiff does not expect 3 any major changes to his income, expenses, assets, or liabilities in the coming twelve 4 months. Id. ¶ 9. Based on the foregoing, the Court concludes that paying court costs would 5 result in Plaintiff being unable to afford the “necessities of life,” Escobeda, 787 F.3d at 6 1234, and accordingly GRANTS Plaintiff’s IFP Motion. In light of the Court’s 7 consideration and disposition of the timely IFP Motion on the merits, the Court further 8 DENIES AS MOOT Plaintiff’s Motion to Vacate. 9 SCREENING PURSUANT TO 28 U.S.C. § 1915(e)(2) 10 I. Standard of Review 11 Because Plaintiff is proceeding IFP, his Complaint requires a pre-answer screening 12 pursuant to 28 U.S.C. § 1915(e)(2). See, e.g., Calhoun v. Stahl, 254 F.3d 845, 845 (9th 13 Cir. 2002) (per curiam) (holding 28 U.S.C. § 1915(e)(2) screening applies to non-prisoners 14 proceeding IFP); see also Lopez v. Smith, 203 F.3d 1122, 1126–27 (9th Cir. 2000) (en banc) 15 (discussing 28 U.S.C. § 1915(e)(2)). Under this statute, the Court must sua sponte dismiss 16 a complaint, or any portion of it, that is frivolous, is malicious, fails to state a claim, or 17 seeks damages from defendants who are immune. See Lopez, 203 F.3d at 1126–27. “The 18 purpose of [screening] is ‘to ensure that the targets of frivolous or malicious suits need not 19 bear the expense of responding.’” Nordstrom v. Ryan, 762 F.3d 903, 920 n.1 (9th Cir. 20 2014) (citations omitted). 21 “The standard for determining whether a plaintiff has failed to state a claim upon 22 which relief can be granted under § 1915(e)(2)(B)(ii) is the same as the Federal Rule of 23 Civil Procedure 12(b)(6) standard for failure to state a claim.” Watison v. Carter, 668 F.3d 24 1108, 1112 (9th Cir. 2012). Rule 12(b)(6) requires that a complaint “contain sufficient 25 factual matter, accepted as true, to state a claim to relief that is plausible on its face.” 26 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted); Wilhelm, 27 680 F.3d at 1121. Detailed factual allegations are not required, but “[t]hreadbare recitals 28 of the elements of a cause of action, supported by mere conclusory statements, do not 1 suffice.” Iqbal, 556 U.S. at 678. “Determining whether a complaint states a plausible 2 claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on 3 its judicial experience and common sense.” Id. The “mere possibility of misconduct” or 4 “unadorned, the defendant-unlawfully-harmed me accusation[s]” fall short of meeting this 5 plausibility standard. Id.; see also Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 6 2009). Further, “[w]hile factual allegations are accepted as true, legal conclusions are not.” 7 Hoagland v. Astrue, No. 1:12-cv-00973-SMS, 2012 WL 2521753, at *3 (E.D. Cal. June 8 28, 2012) (citing Iqbal, 556 U.S. at 678). 9 Courts have a duty to construe a pro se litigant’s pleadings liberally. See Karim- 10 Panahi v. L.A. Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988). The district court should 11 grant leave to amend if it appears “at all possible that the plaintiff can correct the defect,” 12 unless the court determines that “the pleading could not possibly be cured by the allegation 13 of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130–31 (9th Cir. 2000) (en banc) (citing 14 Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Balistreri v. Pacifica Police Dep’t, 15 901 F.2d 696, 701 (9th Cir. 1990)). 16 II. Plaintiff’s Factual Allegations 17 Plaintiff is a Navy veteran who was placed in El Capitan Mobile Home Park (“El 18 Capitan”) by the U.S. Department of Housing and Urban Development–U.S. Department 19 of Veterans Affairs Supportive Housing (“HUD-VASH”) Program. Compl. at 1–2. 20 Defendant Rocky Galgano is the on-site Manager of El Capitan, and Defendant The Star 21 Management Company (“Star”) is the property management company that manages El 22 Capitan. Id. 23 With the assistance of a HUD-VASH Program housing assistant, Plaintiff completed 24 a rental application for El Capitan in 2019. Id. at 2. Five weeks later, Defendant Galgano 25 informed Plaintiff that his application had been approved. Id. Two weeks after Plaintiff 26 moved in, his African American sister and two of Plaintiff’s nieces stayed with Plaintiff 27 while their apartment was being renovated. Id. Plaintiff’s sister owns a small dog that she 28 or Plaintiff’s nieces would walk multiple times each day. Id. Defendant Galgano spoke 1 “rudely” and “gruffly” to Plaintiff’s sister and nieces during these walks and told them that 2 no dogs were allowed, despite several tenants owning and walking dogs in the complex. 3 Id. 4 In 2022, Plaintiff helped a fellow veteran by allowing him, his aging mother, and his 5 two minor daughters to stay with Plaintiff while awaiting a housing placement. Id. These 6 guests, too, were African American, and Defendant Galgano was “rude and gruff” to them 7 as well. Id. Defendant Galgano also has referred to Plaintiff and his various guests as “you 8 people.” Id. 9 Plaintiff alleges that, since 2020, Defendant Galgano, with Star’s knowledge and 10 approval, has issued Plaintiff six “Three-Day Notices to Pay or Quit” threatening Plaintiff 11 with eviction. Id. Plaintiff claims these eviction notices were issued “in an never ending 12 effort to have plaintiff evicted,” id., and that Defendants “create[ed] false rental payment 13 records to justify eviction,” id. at 3. 14 In 2022, Star told Plaintiff he owed $6,000 in rental arrears, and in September 2022, 15 Star filed an unlawful detainer action in state court against Plaintiff for $1,800 in alleged 16 rental arrears. Id. at 2. After Plaintiff was served with the unlawful detainer action, 17 Defendant Galgano asked Plaintiff “how much money would he accept to move,” and told 18 him “not to worry about the suit it would be dropped.” Id. Plaintiff verified with the state 19 court, however, that the unlawful detainer action had not been dropped, and he claims that 20 Defendant Galgano’s statements were intended “to get a default and force plaintiff out.” 21 Id. 22 The Complaint asserts two causes of action: the first for discrimination in violation 23 of the Fair Housing Act, 42 U.S.C. § 3601 et seq. (the “FHA”), and the second for “creating 24 false rental payment records to justify eviction.” Id. at 3. 25 III. Analysis 26 A. FHA Claim 27 “The FHA makes it unlawful to: (1) deny a dwelling to any person because of race; 28 (2) discriminate against any person in the terms, conditions or privileges of rental of a 1 dwelling because of race; and (3) coerce, intimidate, threaten, or interfere with any person 2 in the exercise or enjoyment of any right granted or protected by §§ 3603–06 of this title.” 3 Harris v. Itzhaki, 183 F.3d 1043, 1052 (9th Cir. 1999) (internal citations omitted) 4 (emphasis in original). The statute further “makes it unlawful for owners or their agents to 5 make any statement with respect to the sale or rental of a dwelling that indicates any 6 preference, limitation, or discrimination based on color or an intention to make any such 7 preference, limitation or discrimination. Furthermore, HUD states that 42 U.S.C. § 3604(c) 8 applies to all oral notices or statements by a person engaged in the rental of a dwelling.” 9 Id. at 1054 (citations, including internal citations, omitted). To state a prima facie claim 10 for FHA discrimination, a plaintiff must allege “(1) plaintiff’s rights are protected under 11 the FHA; and (2) as a result of the defendant’s discriminatory conduct, plaintiff has 12 suffered a distinct and palpable injury.” Id. at 1051. 13 Construing Plaintiff’s pro se Complaint liberally, Plaintiff either explicitly or 14 implicitly alleges that Defendants engaged in a long-running and fraudulent campaign to 15 evict Plaintiff from his rental property because of his race, and that Defendant Galgano 16 treated Plaintiff and his guests disparately on the basis of their race. Plaintiff claims 17 Defendants further attempted to mislead him into defaulting in an unlawful detainer suit 18 premised on fraudulent records in order to evict him on the basis of his race. 19 However, Plaintiff fails to allege adequately any “distinct and palpable injury” he 20 suffered as a result of Defendants’ conduct. Harris, 183 F.3d at 1051. For example, 21 Plaintiff does not indicate whether he was in fact evicted due to Defendants’ fraudulent 22 acts, therefore incurring monetary expenses, such as moving expenses or increased rent, he 23 might otherwise have avoided; or whether he suffered compensable emotional distress. See 24 Ambruster v. Monument 3: Realty Fund VIII Ltd., 963 F. Supp. 862, 865 (N.D. Cal. 1997) 25 (recognizing moving costs, increases in rent, and emotional distress as recoverable 26 damages under the FHA). Plaintiff’s request for specific sums in compensatory damages, 27 without more, fails to demonstrate a “distinct and palpable injury.” See, e.g., Golden Gate 28 Transactional Independent Serv., Inc. v. California, Case No. CV 2:18-CV-08093 SJO 1 (AGRx), 2019 WL 1718691, at *4 (C.D. Cal. Jan. 22, 2019) (dismissing FHA claim with 2 leave to amend for failure to adequately allege injury when the pleading claimed only that 3 the plaintiffs had “suffered harm and damages as a result of Defendants’ conduct”) (internal 4 quotation marks and citation omitted). 5 Accordingly, the Court finds that the Complaint fails to state a claim for violation of 6 the FHA and DISMISSES WITHOUT PREJUDICE the claim. 7 B. Fraud Claim 8 Although a district court with original jurisdiction over a federal claim, like 9 Plaintiff’s FHA claim, has supplemental jurisdiction over related state-law claims, like 10 Plaintiff’s fraud claim, see 28 U.S.C. § 1367(a), a court may decline to exercise said 11 supplemental jurisdiction if it has dismissed all the claims over which it had original 12 jurisdiction, see id. § 1367(c)(3). Here, regardless of whether the Court, in its discretion, 13 exercises supplemental jurisdiction over Plaintiff’s state-law fraud claim, the claim is 14 defective and subject to dismissal for much the same reason as Plaintiff’s FHA claim. 15 “Under California law, the indispensable elements of a fraud claim include a false 16 representation, knowledge of its falsity, intent to defraud, justifiable reliance, and 17 damages.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1105 (9th Cir. 2003) (citations 18 and internal quotation marks omitted). Pursuant to Federal Rule of Civil Procedure 9(b), 19 courts apply a heightened pleading standard to actions that sound in fraud. See Fed. R. 20 Civ. P. 9(b) (“In alleging fraud . . . a party must state with particularity the circumstances 21 constituting fraud or mistake.”); see also Vess, 317 F.3d at 1106 (“Averments of fraud must 22 be accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.”). 23 Broadly construed, the Complaint alleges false statements by Defendants (that 24 Plaintiff was in arrears on rent when he was not, and that the unlawful detainer action 25 “would be dropped” when it was not) and Defendants’ knowledge of the statements’ falsity 26 and intent to defraud (the statements were made “to get a default and force plaintiff out”). 27 See Compl. at 2. 28 / / / 1 Again, however, Plaintiff fails to allege his reliance on and damage as a result of 2 these false statements. In fact, Plaintiff alleges that he confirmed with the court that the 3 unlawful detainer action was not dropped, contrary to Defendant Galgano’s assurances to 4 Plaintiff. Further, because this claim sounds in fraud, additional specificity, for example, 5 the date and manner in which the allegedly false statements were made, is required to 6 survive dismissal. 7 Accordingly, the Court finds that the Complaint as presently pleaded fails to state a 8 claim for fraud and DISMISSES WITHOUT PREJUDICE the claim. 10 In light of the foregoing and good cause appearing, the Court hereby: 11 1. GRANTS Plaintiff’s IFP Motion (ECF No. 7); 12 2. DENIES AS MOOT Plaintiff’s Motion to Vacate (ECF No. 6); and 13 3. DISMISSES WITHOUT PREJUDICE Plaintiff’s Complaint (ECF No. 1), 14 pursuant to 28 U.S.C. § 1915(e)(2), for failure to state a claim. 15 Plaintiff MAY FILE an amended complaint curing the deficiencies of pleading 16 noted above on or before June 9, 2023. Any amended complaint must be complete in itself, 17 without reference to Plaintiff’s original Complaint. Any claim not realleged in Plaintiff’s 18 amended complaint will be considered waived. See S.D. Cal. CivLR 15.1; Hal Roach 19 Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1546 (9th Cir. 1989) (“[A]n 20 amended pleading supersedes the original.”); see also Lacey v. Maricopa Cnty., 693 F.3d 21 896, 928 (9th Cir. 2012) (noting that claims dismissed with leave to amend which are not 22 realleged in an amended pleading may be “considered waived”). 23 Should Plaintiff fail to file an amended complaint on or before June 9, 2023, the 24 Court will enter a final Order dismissing this civil action based both on Plaintiff’s failure 25 to state a claim upon which relief can be granted pursuant to 28 U.S.C. § 1915(e)(2) and 26 his failure to prosecute in compliance with a court order requiring amendment. See Lira 27 v. Herrera, 427 F.3d 1164, 1169 (9th Cir. 2005) (“If a plaintiff does not take advantage of 28 / / / 1 ||the opportunity to fix his complaint, a district court may convert the dismissal of the 2 complaint into dismissal of the entire action.”). 4 ||Dated: April 25, 2023 . tt f te 5 on. Janis L. Sammartino 6 United States District Judge 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28