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govinfo:USCOURTS-caed-1_05-cv-01313-2
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IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF CALIFORNIA
BRENDA GRIGGS, )
)
Plaintiff, )
)
vs. )
)
WAYNE STRUMPFER, acting )
California Corporations )
Commissioner, )
)
Defendant. )
)
)
No. CV-F-05-1313 REC SMS
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS PURSUANT
TO RULE 12(b)(6) AND
DIRECTING PLAINTIFF TO FILE
A THIRD AMENDED COMPLAINT.
(Doc. 25)
On Monday, May 15, 2006, the Court heard Defendant’s Motion
to Dismiss Pursuant to Rule 12(b)(6) for Failure to State a Claim
on which Relief Can Be Granted (the “Motion”). Upon due
consideration of the written and oral arguments of the parties,
the Court GRANTS the Motion, as set forth herein.
I. The Second Amended Complaint
Plaintiff’s Second Amended Complaint (the “SAC”) alleges as
follows. Plaintiff Brenda Griggs was married to Brian Griggs.
On August 20, 2001, they purchased a parcel of real property at
1136 West Bullard Avenue, Fresno, California (the “Property”),
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for $141,300 and held it as community property.
Eventually, Plaintiff and Mr. Griggs faced marital problems
and physically separated. On October 27, 2001, they entered into
a property settlement whereby Mr. Griggs transferred his share of
the Property to Plaintiff.
At some point, Mr. Griggs agreed to pay restitution of
$500,000 to the California Department of Corporations (“CDC”)
based on certain alleged misconduct which did not involve
Plaintiff. On November 18, 2001, CDC recorded an Abstract of
Judgment with the Fresno County Recorder. After the Abstract of
Judgment was recorded, the Property became subject to a $500,000
administrative lien.
On May 31, 2005, Plaintiff sent a written request to the CDC
requesting notice and an opportunity for a hearing challenging
the validity and enforceability of the lien. See SAC Ex. D. On
June 10, 2005, Defendant Wayne Strumpfer, Acting California
Corporations Commissioner (“Defendant”), sent Plaintiff a letter
denying her request for notice and a hearing.
II. Discussion
A. Legal Standard
Dismissal of a complaint pursuant to Rule 12(b)(6) is proper
if “it appears beyond doubt that the plaintiff can prove no set
of facts in support of his claim which would entitle him to
relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2
L. Ed. 2d 80 (1957). In testing the sufficiency of a complaint
against a Rule 12(b)(6) challenge, a court must “accept all
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material allegations in the complaint as true and construe them
in the light most favorable to the plaintiff.” N. Star Int’l v.
Ariz. Corp. Comm’n, 720 F.2d 578, 580 (9th Cir. 1983). The Court
need not, however, “accept legal conclusions cast in the form of
factual allegations if those conclusions cannot reasonably be
drawn from the facts alleged.” Clegg v. Cult Awareness Network,
18 F.3d 752, 754-55 (9th Cir. 1994).
A complaint may be dismissed as a matter of law if there is
a lack of a cognizable legal theory or if there are insufficient
facts alleged under a cognizable legal theory. Balistreri v.
Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). The
Court must determine whether or not it appears to a certainty
under existing law that no relief can be granted under any set of
facts that might be proved in support of a plaintiff’s claims.
De La Crux v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978), cert.
denied, 441 U.S. 965, 99 S. Ct. 2416, 60 L. Ed. 2d 1072 (1979).
The Court may consider the complaint itself along with any
material properly considered as part of the complaint.
Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542,
1555 n. 19 (9th Cir. 1989). Where the complaint fails to state a
claim on which relief can be granted, leave to amend “shall be
freely given when justice so requires.” Fed. R. Civ. P. 15(a);
Allen v. Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990).
B. Eleventh Amendment
The Eleventh Amendment bars a claim for damages against a
state in federal court. Kentucky v. Graham, 473 U.S. 159, 167,
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105 S. Ct. 3099, 87 L. Ed. 2d 114 (1985). A suit against a state
official in his official capacity is “no different from a suit
against the state itself.” Will v. Mich. Dep’t of State Police,
491 U.S. 58, 71, 109 S. Ct. 2304, 105 L. Ed. 2d 45 (1989). The
Supreme Court recognized an exception to this rule in Ex parte
Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908). The
doctrine of Ex parte Young provides that the Eleventh Amendment
does not bar “federal jurisdiction over a suit against a state
official when that suit seeks only prospective injunctive relief
in order to ‘end a continuing violation of federal law.’”
Armstrong v. Wilson, 124 F.3d 1019, 1025 (9th Cir. 1997) (quoting
Seminole Tribe v. Florida, 517 U.S. 44, 73, 116 S. Ct. 1114, 134
L. Ed. 2d 252 (1996)).
Plaintiff seeks injunctive relief in this action,
specifically “release of the lien.” SAC 7:17. Plaintiff is
essentially alleging that Defendant, a state official sued in his
official capacity, is violating her Due Process rights by
continuing to hold the lien against her. Provided she states a
claim for a constitutional violation entitling her to injunctive
relief, the Eleventh Amendment does not bar such claims. Her
claims for money damages, however, cannot not fall within the Ex
parte Young exception. Amending her complaint cannot resuscitate
any claim for money damages against a state official sued in his
official capacity. Accordingly, Plaintiff’s claims for money
damages are DISMISSED WITH PREJUDICE.
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C. Section 1983 Claims
Plaintiff seeks relief based on 28 U.S.C. section 1983
(“Section 1983”) for alleged violations of her constitutional
rights under the Due Process and Equal Protection Clauses of the
United States Constitution. Defendant contends that Plaintiff
fails to state a claim for deprivation of any constitutional
right.
1. Due Process Claim
Plaintiff claims that Defendant’s refusal to give Plaintiff
notice of its judgment lien and to grant her a hearing violates
her due process rights. The Fourteenth Amendment prohibits the
deprivation of property without procedural due process. Koepping
v. Tri-County Metro. Transp. Dist., 120 F.3d 998, 1005 (9th Cir.
1997); see generally Carey v. Piphus, 435 U.S. 247, 98 S. Ct.
1042, 55 L. Ed. 2d 252 (1978).
The United States Supreme Court has established a two-part
analysis for due process challenges to state deprivation of
property rights. See, e.g., Fuentes v. Shevin, 407 U.S. 67, 92
S. Ct. 1983, 32 L. Ed. 2d 556 (1972); Mathews v. Eldridge, 424
U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976). The first
inquiry is whether the statute results in the deprivation of a
“significant” property interest. Fuentes, 407 U.S. at 86. If
the interests affected are “significant,” then the court must
examine what process is due under the particular circumstances.
“[E]ven the temporary or partial impairments to property rights
that attachments, liens, and similar encumbrances entail are
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sufficient to merit due process protection.” Connecticut v.
Doehr, 501 U.S. 1, 12, 111 S. Ct. 2105, 115 L. Ed. 2d 1 (1991).
In considering what process is due, the court is guided by
the three-factor balancing test articulated in Mathews v.
Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976).
The Mathews Court held that in determining the sufficiency of the
process provided by the state, the court should consider:
first, the private interest that will be
affected by the official action; second, the
risk of an erroneous deprivation of such
interest through the procedures used, and the
probable value, if any, of additional or
substitute safeguards; and finally, the
Government’s interest, including the function
involved and the fiscal and administrative
burdens that the additional or substitute
procedural requirement would entail.
Id. at 335.
In order to establish a due process claim under Section
1983, Plaintiff must show that the lien deprived her of a
property interest. Defendant argues that Plaintiff has not
alleged a “taking” of property as defined in Kelo v. City of New
London, 125 S. Ct. 2655, 162 L. Ed. 2d 439 (2005). That case is
inapposite because it concerned the permissibility of the
government’s actions under the Takings Clause of the Fifth
Amendment, not under the Due Process Clause. Id. at 2658.
Based on the broad definition of property deprivation under
the Due Process Clause that the Supreme Court recognized in
Doehr, a person need not be totally deprived of his property for
due process rights to attach. Doehr, 501 U.S. at 12. Plaintiff
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has contended that the lien has prevented her from alienating her
property without incurring a total loss of equity. SAC 6:24-25.
Even this “temporary or partial impairmen[t]” potentially
triggers Plaintiff’s entitlement to due process. Doehr, 501 U.S.
at 12.
Plaintiff appears to concede that Defendant properly
recorded the Abstract of Judgment: “The legality of the
recording of the Abstract of Judgment is not being challenged by
the plaintiff . . . .” Opp’n 5:3-5. The Abstract of Judgment,
as Defendant filed it with the Fresno County Recorder, does not
mention Brenda Griggs or the Property. Compl. Ex. B. It appears
that filing the Abstract of Judgment resulted in a lien on the
Property only through the actions of the Fresno County Recorder.
Plaintiff claims that, under the property laws of
California, the lien does not properly attach to her property.
Plaintiff cites California Family Code section 1000(a), which
provides: “A married person is not liable for any injury or
damage caused by the other spouse except in cases where the
married person would be liable therefor if the marriage did not
exist.” While this passage does establish that Plaintiff cannot
herself be liable solely on the basis of her husband’s wrongful
acts, it is not dispositive as to how community property may be
used to satisfy debts incurred by those wrongful acts.
Whether community property can be reached to satisfy one
spouses debts turns on whether the activity was undertaken to
benefit the community:
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The liability of a married person for death
or injury to person or property shall be
satisfied as follows:
(1) If the liability of the married person is
based upon an act or omission which occurred
while the married person was performing an
activity for the benefit of the community,
the liability shall first be satisfied from
the community estate and second from the
separate property of the married person.
(2) If the liability of the married person is
not based upon an act or omission which
occurred while the married person was
performing an activity for the benefit of the
community, the liability shall first be
satisfied from the separate property of the
married person and second from the community
estate.
Cal. Fam. Code § 1000(b).
The face of the SAC does not establish whether Mr. Griggs’s
liability was incurred performing an activity for the benefit of
the community. Under a conceivable set of facts, Mr. Griggs was
not acting for the benefit of the community. In such a case, his
separate property should be used to satisfy the debt before
community property is used. Such a circumstance would not
prevent community property from being used to satisfy any
remaining debt.
Plaintiff also contends the lien is improper on the basis
that the Property was her separate property at the time the
Abstract of Judgment was filed, based on the property settlement
agreement she and Mr. Griggs entered on October 27, 2001. She
claims that she should hold the Property free of the lien under
California’s Recording Act. She argues that she was a subsequent
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California Civil Code section 1214 provides, in full:1
Every conveyance of real property or an estate
for years therein, other than a lease for a
term not exceeding one year , is void as
against any subsequent purchaser or mortgagee
of the same property, or any part thereof, in
good faith and for a valuable consideration,
whose conveyance is first duly recorded, and
as against any judgment affecting the title,
unless the conveyance shall have been duly
recorded prior to the record of notice of
action.
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purchaser for value who took the Property without notice of the
lien. See Cal. Civil Code § 1214; Gates Rubber Co. v. Ulman,1
214 Cal. App. 3d 356, 364 (1989) (“The elements of bona fide
purchase are payment of value, in good faith, and without actual
or constructive notice of another’s rights.”). Plaintiff does
not allege, however, that she recorded this transaction prior to
the filing of the Abstract of Judgment. See Chalmers v. Raras,
200 Cal. App. 2d 682, 686 (1962) (“[R]ecordation will protect a
subsequent purchaser in good faith against an unrecorded
instrument executed prior to this recordation.”)
Regardless of the merits of Plaintiff’s claims that the lien
should not have attached to the Property under California law, it
is unclear how she is entitled to relief in this action.
Plaintiff’s allegations are directed only at Defendant, the
judgment creditor. She claims that she was denied due process
based solely on the fact that Defendant did not give her notice
of the lien on the Property and that Defendant denied her request
for a hearing. Plaintiff does not contend that she has no means
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to challenge the lien other than a hearing provided by Defendant.
Nor does she contend that California law regarding recorded liens
provides inadequate notice or inadequate access to a hearing.
She also does not contend that the Fresno County Recorder acted
improperly when it deemed the Abstract of Judgment against Mr.
Griggs to create a lien on the Property.
Plaintiff does not cite, and the Court is unaware of, any
requirement that a judgment creditor, who happens to be a
government entity, provide a means for a person against whose
property it holds a lien to challenge the validity or provide
notice to that person. It appears rather that Plaintiff’s proper
means of attacking the lien would be in a California court,
through an action to quiet title. See Lezine v. Sec. Pac. Fin.
Servs., Inc., 14 Cal. 4th 56 (1996) (action by nondebtor spouse
to set aside abstract of judgment recorded against community
property). Plaintiff does not contend that California law
inadequately protects her due process rights.
The Due Process Clause guarantees the right to be heard “at
a meaningful time and in a meaningful manner.” Mathews, 424 U.S.
at 333. This does not equate to Plaintiff’s right to a hearing
of her choice. Plaintiff’s claim fails if she had notice and an
opportunity to be heard prior to being deprived of property. Her
claim does not succeed merely on the basis that Defendant did not
provide her with those things.
Plaintiff has not alleged that she was unable to challenge
Defendant’s lien through other channels, such as in California
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state court. Nor has she cited any authority for the proposition
that Defendant, as judgment creditor, was required to provide her
notice and a hearing. Accordingly, Plaintiff’s Count One based
on the Due Process clause is DISMISSED WITHOUT PREJUDICE.
2. Equal Protection
The Equal Protection Clause requires that “all persons
similarly situated should be treated alike.” Squaw Valley Dev.
Co. v. Goldberg, 375 F.3d 936, 944 (9th Cir. 2004). This
protection can extend to individuals who claim that they
constitute a “class of one.” Id. Where the claim does not
implicate a fundamental right or suspect classification, the
plaintiff can establish an equal protection claim by
demonstrating that she “has been intentionally treated
differently from others similarly situated and that there is no
rational basis for the difference in treatment.” Id. (citing
Vill. of Willowbrook v. Olech, 528 U.S. 562, 564, 120 S. Ct.
1073, 145 L. Ed. 2d 1060 (2000)). “[D]iscrimination cannot exist
in a vacuum; it can be found only in the unequal treatment of
people in similar circumstances.” United States v. Aguilar, 883
F.2d 662, 706 (9th Cir. 1989) (quoting Attorney General v. Irish
People, Inc., 684 F.2d 928 (D.C. Cir. 1982), cert. denied, 459
U.S. 1172, 103 S. Ct. 817, 74 L. Ed. 2d 1015 (1983)).
Plaintiff claims that Defendant treated her differently than
it treated her neighbors when it subjected her property to a
lien. Plaintiff has not alleged that her neighbors are similarly
situated to her with respect to Defendant. The only allegation
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is of similarity is that they are “property owners in her
neighborhood.” SAC 7:13-14. Plaintiff’s claim appears to be
that her neighbors are similarly situated merely by owning
property in the same neighborhood as her. She does not allege
that her neighbors have a relationship to Defendant that
indicates their circumstances are similar to hers. See, e.g.,
Squaw Valley, 375 F.3d at 944 (comparing defendant water quality
officials’ treatment of plaintiff to its treatment of other
property owners who discharged into subject waterways); Aguilar,
883 F.2d at 708 (treatment of accused illegal alien smugglers
complaining of equal protection violation was properly compared
to others prosecuted for smuggling illegal aliens). Accordingly,
Plaintiff’s Count Two is DISMISSED WITHOUT PREJUDICE.
ACCORDINGLY:
1. Plaintiff’s claims for money damages are DISMISSED WITH
PREJUDICE on Eleventh Amendment grounds.
2. Plaintiff’s Count One based on the Due Process Clause is
DISMISSED WITHOUT PREJUDICE.
3. Plaintiff’s Count Two based on the Equal Protection Clause
is DISMISSED WITHOUT PREJUDICE.
4. Plaintiff shall file a third amended complaint within 30
days of the issuance of this order. Failure to comply will
result in dismissal of the action.
IT IS SO ORDERED.
Dated: May 25, 2006 /s/ Robert E. Coyle
810ha4 UNITED STATES DISTRICT JUDGE
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