United States District Court, W.D. Washington, Seattle
ORDER ON PENDING MOTIONS
RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE.
Plaintiff has filed suit against 29 named Defendants
and 100 Doe Defendants. Pending before the Court are five
motions to dismiss:
1) Motion of Defendants City of Seattle, Melvin Britt Jr.,
& Ronald Campbell to Dismiss for Lack of Subject Matter
Jurisdiction and Failure to State a Claim. Dkt. #24. The
Court will refer to the City of Seattle as “Defendant
City, ” to Melvin Britt Jr. as “Defendant Britt,
” to Ronald Campbell as “Defendant Campbell,
” and to these Defendants collectively as the
2) Defendant Jonathan Dreitzler's Motion to Dismiss and
Joinder in City of Seattle Defendants' Motion to Dismiss.
Dkt. #41. The Court will refer to Jonathan Dreitzler as
3) Defendants Windermere Services Company's and Kathyrn
[sic] Hinds' Motion to Dismiss for Failure to State a
Claim. Dkt. #45. The Court will refer to Windermere Services
Company as “Defendant Windermere, ” to Kathryn
Hinds as “Defendant Hinds, ” and to these
Defendants collectively as the “Windermere
4) King County and Thomas MacKenzie Brown's Motion to
Dismiss. Dkt. #53. The Court will refer to King County as
“Defendant County, ” to Thomas MacKenzie Brown as
“Defendant Brown, ” and to these Defendants
collectively as the “County Defendants.”
5) Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss.
Dkt. #74. The Court will refer to Wells Fargo Bank,
as “Defendant Wells Fargo.”
has opposed these Motions. Dkts. #55-60, #79-84, #89, #92-#95, and
Also pending before the Court is Plaintiff's Motion and
Notice of Motion to Strike the Notice of Appearance of
Michael S. Deleo & Michael T. Callan. Dkts. #76-78.
Defendant Dreitzler has opposed Plaintiff's Motion. Dkt.
#88. Having reviewed the record and for the reasons set forth
below, the Court resolves the Motions as follows.
claims relate to a 2009 non-judicial foreclosure and
subsequent trustee sale of property in which Plaintiff may
have had an ownership interest. The numerous parties sued by
Plaintiff are involved, to varying degree, in the events
leading up to or following that sale. The Court will attempt
to present a brief overview and detail the involvement of
individual Defendants with regard to their specific motions
secured a loan of one million three hundred eleven thousand
dollars ($1, 311, 000) from Private Lenders Group, LLC
(“PLG”) on or about January 24, 2007.
See Dkt. #3-1 at 17- 39. The loan was intended to be
used by Williams Family Holdings LLC-of which Plaintiff was a
member/manager-for the purpose of financing and funding the
construction of a single family residence at 515 35th Avenue
South, Seattle, WA. Id. at 17. The loan was secured
by a deed of trust upon the property. Id. at 37-38.
Following closing of the transaction, PLG assigned the
promissory note to PRK Funding Services, Inc.
(“PRK”), as custodian for the noteholders in PLG
Fund I, LLC. Id. at 32, 37-38.
began construction on the property but the project was not
completed in the anticipated timeframe and ran into financial
trouble due to the conduct of PLG and its agents. Dkt. #3 at
¶ 34; Dkt. #3-1 at 2-13. Plaintiff attempted to
refinance the project. Id. But the trustee on the
deed of trust ultimately initiated non-judicial foreclosure
under Chapter 61.24, Revised Code of Washington. Dkt. #3-1 at
37-39; 84-85. The trustee sale was scheduled for September
11, 2009. Id. at 38. Plaintiff filed for voluntary
Chapter 7 bankruptcy on September 10, 2009. Id. at
15. Nevertheless, the trustee held the trustee sale, as
scheduled, on September 11, 2009, with PRK purchasing the
property. Id. at 37-39. Plaintiff's Chapter 7
bankruptcy was later dismissed, on October 7, 2009,
“for Failure to File Schedules or Statements.”
Id. at 68.
the trustee sale, PRK and Plaintiff each asserted ownership
over the property. Id. at 78, 84-85. On January 19,
2010, Plaintiff filed a “Notice of Fraud and Intent to
Litigate” against the property with the King County
Auditor. Id. at 89-92. On January 25, 2010,
representatives of PRK and PLG summoned the police to the
property, gained entry to the structure, and towed a vehicle
from the property. Id. at 41-62. Thereafter,
Plaintiff obtained a temporary protection order against
Jonathan Dreitzler, an agent of PLG and PRK, on January 26,
2010, from the King County District Court. Id. at
120-27. PRK initiated an unlawful detainer action against
Plaintiff in King County Superior Court on January 29, 2010.
Id. at 111-17. Also on January 29, 2010, Plaintiff
filed a lis pendens against the property with the King County
Auditor. Id. at 131-33.
on December 8, 2010, PRK sold the property to Kirill
Gavrylyuk and Chandrika Shankarnarayan and they have remained
in possession ever since. Id. at 94.
Court Has Subject Matter Jurisdiction
initial matter, City Defendants and County Defendants seek
dismissal under Federal Rule of Civil Procedure 12(b)(1) on
the basis that this Court lacks jurisdiction over
Plaintiff's action. Dkt. #24 at 5-9; Dkt. #53 at 3-4.
Plaintiff bears the burden of establishing that his case is
properly within the limited jurisdiction of the federal
court. Kokkonen v. Guardian Life Ins. Co., 511 U.S.
375, 377 (1994); In re Ford Motor Co./Citibank (South
Dakota), N.A., 264 F.3d 952, 957 (9th Cir. 2001). At the
pleading stage, Plaintiff must plead sufficient allegations
to show a proper basis for the federal court to assert
subject matter jurisdiction over the action. McNutt v.
General Motors Acceptance Corp., 298 U.S. 178, 189
question jurisdiction exists when the plaintiff's claim
arises “under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331. “[A]
federal question [must be] presented on the face of the
plaintiff's properly pleaded complaint.”
Caterpillear, Inc. v. Williams, 482 U.S. 386, 392
(1987). A complaint making state law claims with passing
reference to a federal statute will not establish
jurisdiction. Lippitt v. Raymond James Financial
Services, Inc., 340 F.3d 1033, 1040-41 (9th Cir. 2003).
Rather, the state law claims must implicate a substantial
federal question. Id. at 1042. Jurisdiction is
proper where “the right to relief depends on the
resolution of a substantial, disputed federal
question.” Id. (quoting ARCO Envtl.
Remediation, L.L.C. v. Dep't of Health and Envtl. Quality
of the State of Mont., 213 F.3d 1108, 1114 (9th Cir.
2000)) (quotation marks omitted).
Defendants and County Defendants argue that Plaintiff's
Complaint fails to assert a federal question because any
Constitutional claims are frivolous and mere seasoning to
state law claims. Dkt. #24 at 5-9; Dkt. #53 at 3-4. City
Defendants argue further that to the extent Plaintiff's
Complaint asserts violations of the automatic bankruptcy stay
under 11 U.S.C. § 362, the bankruptcy courts have
exclusive jurisdiction over those claims. Dkt. #24 at 6-8.
But the Court is satisfied that federal question jurisdiction
Plaintiff asserts somewhat vague allegations related to
racketeering, presumably under 18 U.S.C. § 1961 et
seq. Dkt. #3 at ¶¶ 37-52. While the
allegations do not specifically invoke the federal statute-as
opposed to Washington's analog, Chapter 9A.82, Revised
Code of Washington-, the allegations utilize the phrasing of
the federal statute. Plaintiff's RICO claims alone are
sufficient to invoke this Court's jurisdiction and will
be addressed below.
Plaintiff's central grievance is that the trustee sale
occurred in violation of the automatic bankruptcy stay, in
violation of federal law. Even so, City Defendants argue that
violations of the bankruptcy stay are “within the
exclusive jurisdiction of the federal bankruptcy
courts.” Dkt. #24 at 7 (citing MSR Exploration,
Ltd. v. Meridian Oil, Inc., 74 F.3d 910, 916 (9th Cir.
1996)). But City Defendants' reliance on MSR
Exploration, Ltd. is misplaced. In that case, the Ninth
Circuit concluded that a state law claim of malicious
prosecution, which arose out of a creditor's claim
against the debtor in an earlier bankruptcy, was preempted by
the bankruptcy code. Id. at 913. As part of the
court's consideration, it noted that the bankruptcy code
provided the debtor with sufficient protections from false
creditor claims within the confines of the bankruptcy action.
Id. at 915. Thus, while a claim for a violation of
the bankruptcy code was not before the court, it opined that
such a claim should be asserted within the underlying
bankruptcy proceeding. Id. at 916.
Exploration, Ltd. does not preclude the Court's
jurisdiction and more recent precedent supports this
Court's jurisdiction, at least at this early stage.
See In re Curtis, 571 B.R. 441 (9th Cir. BAP 2017)
(noting that that “district courts have jurisdiction
over bankruptcy cases and proceedings; the bankruptcy
court's jurisdiction over such matters is purely and
solely derivative of the district court's jurisdiction .
. . . [and] entirely dependent upon the referral by the
district court”). While this Court has generally
referred bankruptcy matters to the bankruptcy court, LCR
87(a), the Court is permitted to withdraw the referral and
may do so by exercising jurisdiction. 28 U.S.C. §
157(d); Anderson v. Fed. Deposit Ins. Corp., 918
F.2d 1139 (4th Cir. 1990) (finding that district court
impliedly withdrew referral to bankruptcy court where it
exercised jurisdiction over a case in which the bankruptcy
trustee was substituted as plaintiff). As noted in In re
Curtis, “[l]itigants are not precluded from
requesting transfer of a case from a district court to a
bankruptcy court.” 571 B.R. at 449; LCR 87(b). But at
this early stage and due to the numerous other non-bankruptcy
claims, the Court finds it appropriate to consider the case.
found that this Court has subject matter jurisdiction due to
a substantial federal question, the Court need not consider
whether diversity jurisdiction exists.
Relevant Legal Standards
Motion to Dismiss
motioning Defendants have sought dismissal pursuant to
Federal Rule of Civil Procedure 12(b)(6). In making a Rule
12(b)(6) assessment, the court accepts all facts alleged in
the complaint as true, and makes all inferences in the light
most favorable to the non-moving party. Baker v.
Riverside Cnty. Office of Educ., 584 F.3d 821, 824 (9th
Cir. 2009) (citations omitted). However, the court is not
required to accept as true a “legal conclusion couched
as a factual allegation.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). “Determining
whether a complaint states a plausible claim for relief will
. . . be a context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” Id. at 679 (citations omitted).
complaint must contain sufficient facts “to state a
claim for relief that is plausible on its face.”
Id. at 678. This requirement is met when the
plaintiff “pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. The complaint
need not include detailed allegations, but it must have
“more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do.” Twombly, 550 U.S. at 555. “The
plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully. . . . Where a
complaint pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 556, 557). Absent facial plausibility, a
plaintiff's claims must be dismissed.
Court must also remain mindful that Plaintiff is proceeding
pro se. “The Supreme Court has instructed the federal
courts to liberally construe the ‘inartful
pleading' of pro se litigants.” Eldridge v.
Block, 832 F.2d 1132, 1137 (9th Cir. 1987) (citing
Boag v. MacDougall, 454 U.S. 364, 365 (1982)). Pro
se plaintiffs are ultimately held “to less stringent
standards than formal pleadings drafted by lawyers.”
Haines v. Kerner, 404 U.S. 519, 520 (1972).
Nevertheless, “courts should not have to serve as
advocates for pro se litigants.” Noll v.
Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987). Indeed,
“[h]e who proceeds pro se with full knowledge and
understanding of the risks does so with no greater rights
than a litigant represented by a lawyer, and the trial court
is under no obligation to . . . assist and guide the pro se
layman[.]” Jacobsen v. Filler, 790 F.2d 1362,
1365, n. 5 (9th Cir. 1986) (quoting United States v.
Pinkey, 548 F.2d 305 (10th Cir. 1977)).
Consideration of Materials Outside Pleadings and Judicial
City Defendants, Defendant Dreitzler,  County
Defendants,  and Defendant Wells Fargo have all
requested that the Court consider facts or documents outside
of the pleadings. Dkts. #25; #41 at 6-7; #42; #53 at 6 n.1;
#75. In considering a Rule 12(b)(6) motion, the Court
generally considers “the complaint in its entirety, . .
. documents incorporated into the complaint by reference, and
matters of which a court may take judicial notice.”
Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007) (citations omitted). Here, the Court
has considered the documents Plaintiff attached to his
Complaint and has taken judicial notice of, and considered,
the documents attached to the Declaration of Josh Johnson
(Dkt. #25) and the documents attached to Defendant Wells
Fargo's request (Dkt. #75). Judicial notice is
appropriate because Plaintiff has not objected, has not
contested the authenticity of the documents, and the accuracy
of the sources cannot be reasonably questioned. Fed R. Evid.
Plaintiff Fails to Adequately Plead RICO Claims
initial matter, Plaintiff has made vague allegations related
to racketeering, presumably under 18 U.S.C. §§ 1961
et seq. Dkt. #3 at ¶¶ 37-52. While
Plaintiff's Complaint is far from clear, Plaintiff
appears to allege that all Defendants engaged in
racketeering and the Court finds it appropriate to address
these claims collectively. To successfully state a claim
under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), a plaintiff must allege “(1)
conduct (2) of an enterprise (3) through a pattern (4) of
racketeering activity (known as ‘predicate acts')
(5) causing injury to the plaintiff's ‘business or
property.'” Grimmet v. Brown, 75 F.3d 506,
510 (9th Cir. 1996) (citing 18 U.S.C. §§ 1964(c),
1962(c)). Most relevant to Plaintiff's allegations, an
“enterprise” is an entity or “group of
persons associated together for a common purpose of engaging
in a course of conduct.” U.S. v. Turkette, 452
U.S. 576, 583 (1981). Pleading an enterprise requires more
than merely pleading a pattern of racketeering activity
because “[t]he ‘enterprise' is not the
‘pattern of racketeering activity', it is an entity
separate and apart from the pattern of activity in which it
fails to adequately plead a RICO claim as to any Defendant.
First, Plaintiff does not adequately plead an enterprise.
Plaintiff specifically alleges that PLG, PRK, and Defendant
Pyatt Broadmark Management, LLC belong to a
“syndicate.” Dkt. #3 at ¶ 43. But beyond
that conclusory allegation, Plaintiff does not allege any
facts demonstrating a plausible enterprise separate from the
pattern of alleged racketeering. With regard to all
Defendants, Plaintiff relies only on general allegations that
track the elements of the cause of action. See e.g.
Dkt. #3 at ¶ 41 (“[Plaintiff] has perfected a
claim by showing the existence of an enterprise, showing a
pattern of racketeering activity: fraud, shown nexus between
the Trespassers and the pattern of frauds, and shown
resulting injury to property.”). Plaintiff's
non-specific allegations are insufficient to plead the
existence of an enterprise or a pattern of racketeering
through fraud. See Clark v. Countrywide Home Loans,
Inc., 732 F.Supp.2d 1038, 1046 (E.D. Cal. 2010) (finding
allegations “that every defendant was aware that the
notice of default [on a deed of trust] was invalid and that
every defendant either participated in or rendered
substantial assistance in the issuance of the invalid notice
. . . . not remotely sufficient to support” a civil
Plaintiff's current RICO allegations are precluded by the
statute of limitations. “The statute of limitations for
civil RICO actions is four years” and runs from the
time “a plaintiff knows or should know of the injury
that underlies his cause of action.” Pincay v.
Andrews, 238 F.3d 1106, 1108-09 (9th Cir. 2001)
(citations omitted). Even if new predicate acts occurred
within the four years prior to Plaintiff filing this action,
Plaintiff cannot use a “new predicate act as a
bootstrap to recover for injuries caused by other earlier
predicate acts that took place outside the limitations
period.” Klehr v. A.O. Smith Corp., 521 U.S.
179 (1997) (citations omitted). While Plaintiff points to
several events that have taken place within the four years
prior to his suit, he does not indicate which events may
qualify as “racketeering activity” for the