Glaude v. Deutsche Bank ( 2024 )

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 DONALD GLAUDE, 10 Case No. 23-cv-05429-RS Plaintiff, 11 v. ORDER GRANTING MOTION TO 12 DISMISS, DENYING MOTION FOR DEUTSCHE BANK, et al., PRELIMINARY INJUNCTION, AND 13 DENYING MOTION FOR JUDGMENT Defendants. ON THE PLEADINGS 14 15 16 I. INTRODUCTION 17 Defendant Deutsche Bank National Trust Company (“Deutsche Bank”) moves to dismiss 18 Plaintiff Donald Glaude’s claims against it in this newest round of litigation concerning the 19 ownership of, and foreclosure on, 8096 Juniper Avenue, Newark, California (“the Property”). 20 Deutsche Bank argues Glaude’s claims are barred by the doctrine of res judicata or, in the 21 alternative, should be stayed or dismissed under the Colorado River and/or Rooker-Feldman 22 doctrines.1 Deutsche Bank’s motion to dismiss is granted, and Glaude’s motions for a preliminary 23 injunction and for judgment on the pleadings are dismissed as moot. 24 25 26 1 It is not immediately clear whether Glaude is asserting legal error by a state court in the instant action such that the Rooker-Feldman doctrine applies. See Kougasian v. TMSL, Inc., 359 F.3d 27 1136, 1140 (9th Cir. 2004). Since Glaude’s claims fail for other reasons, this issue need not be 1 II. BACKGROUND 2 Though Glaude filed the instant action on October 23, 2023, he has been litigating the 3 ownership of, and fighting foreclosure on, the Property for years. On May 17, 2005, Frederick 4 Tinsley and Senora Glaude obtained a loan from Washington Mutual Bank, secured by a Deed of 5 Trust on the Property. The Deed of Trust identified Tinsley and Senora Glaude as the borrowers 6 and Washington Mutual Bank as the beneficiary. On January 31, 2009, Washington Mutual 7 assigned its interest in the Property to Deutsche Bank. Since then, Glaude has filed several state 8 and federal court actions,2 alleging (1) Tinsley took advantage of Senora Glaude in order to win 9 ownership of the Property and (2) Deutsche Bank and other entities violated federal and state law 10 in attempting to foreclose on the Property. Glaude has also pursued three unsuccessful Chapter 13 11 bankruptcy filings in United States Bankruptcy Court. 12 In his previous federal court action (the “First Federal Action”), Glaude repeated 13 allegations he had made in state court that Deutsche Bank violated the law in attempting to 14 foreclose on the Property. The foreclosure sale was initially enjoined so that Glaude’s claims 15 could be heard. Subsequently, those claims were dismissed as barred under the Colorado River 16 and Rooker-Feldman doctrines on April 20, 2020, and the case was dismissed on May 13, 2020, 17 after Glaude failed to amend his complaint. See Glaude v. Deutsche Bank Nat’l Trust Co., No. 20- 18 cv-1252 (N.D. Cal. May 13, 2020). Several months after the First Federal Action was dismissed, 19 the California Court of Appeal affirmed the Alameda County Superior Court’s decision to sustain 20 a demurrer to Glaude’s fourth amended cross-complaint (the “State Action”). See Tinsley v. 21 Glaude, A156442, 2020 WL 5087939 (Cal. Ct. App. Aug. 28, 2020). The Supreme Court of 22 California declined to disturb this affirmance. Deutsche Bank represents the Property was sold at a 23 trustee’s sale on August 22, 2023. Glaude filed the instant action on October 23, 2023. 24 25 26 2 On January 27, 2022, the Alameda County Superior Court deemed Glaude a vexatious litigant 27 pursuant to California Code of Civil Procedure § 391(b)(3). Dkt. 32, at 88–89. 1 III. LEGAL STANDARD 2 A complaint must contain “a short and plain statement of the claim showing that the 3 pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While “detailed factual allegations” are not 4 required, a complaint must have sufficient factual allegations to state a claim that is “plausible on 5 its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 6 544, 555, 570 (2007)). Dismissal under Rule 12(b)(6) may be based on either the “lack of a 7 cognizable legal theory” or on “the absence of sufficient facts alleged under a cognizable legal 8 theory.” See Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (internal 9 quotation marks and citation omitted). When evaluating such a motion, the court must accept all 10 material allegations in the complaint as true and construe them in the light most favorable to the 11 non-moving party. In re Quality Sys., Inc. Sec. Litig., 865 F.3d 1130, 1140 (9th Cir. 2017). It must 12 also “draw all reasonable inferences in favor of the nonmoving party.” Usher v. City of Los 13 Angeles, 828 F.2d 556, 561 (9th Cir. 1987). 14 Where a plaintiff has failed to state a claim upon which relief can be granted, leave to 15 amend should be granted unless “the complaint could not be saved by any amendment.” Gompper 16 v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002) (citation and internal quotation marks omitted). 17 This is particularly true for cases involving pro se litigants, who are generally held to a less 18 stringent pleading standard than are represented parties. Haines v. Kerner, 404 U.S. 519, 520 19 (1972). 20 IV. DISCUSSION 21 A. Judicial Notice 22 As a preliminary matter, Deutsche Bank asks that judicial notice be taken of various filings 23 and dockets in state and federal court pursuant to Federal Rule of Evidence 201. “Judicial notice 24 under Rule 201 permits a court to notice an adjudicative fact if it is ‘not subject to reasonable 25 dispute.’” Khoja v. Orexigen Therapeutics, 899 F.3d 988, 999 (9th Cir. 2018) (quoting Fed. R. 26 Civ. P. 201(b)). Courts may take judicial notice of filings in federal and state courts. See Harris v. 27 County of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012). Taking judicial notice of such “matters of 1 public record” does not “convert[] a motion to dismiss into a motion for summary judgment” so 2 long as judicial notice is not taken of “disputed facts contained within such public records.” Khoja, 3 899 F.3d at 999. The court filings to which Deutsche Bank points are public records of which 4 judicial notice may properly be taken, and Deutsche Bank’s request for such notice is granted. 5 B. Res Judicata/Claim Preclusion 6 Deutsche Bank moves to dismiss the Amended Complaint as barred by claim preclusion. 7 Where multiple courts have decided the same claim or issue, a court “should give res judicata 8 effect to the last previous judgment entered.” Americana Fabrics, Inc. v. L&L Textiles, Inc., 754 9 F.2d 1524, 1529–30 (9th Cir. 1985) (emphasis in original). The first question is whether the 10 relevant judgment for res judicata purposes comes from the First Federal Action or the State 11 Action. Deutsche Bank, in moving to dismiss this action on claim preclusion grounds, points to 12 the May 13, 2020, dismissal in the First Federal Action as the relevant judgment. After that 13 decision, however, the California Court of Appeal affirmed the state trial court decision resolving 14 Glaude’s foreclosure-related claims, and the Supreme Court of California declined to disturb this 15 affirmance in October 2020. The state court’s decision is the last-in-time judgment. See Sosa v. 16 DIRECTV, Inc., 437 F.3d 923, 928 (9th Cir. 2006) (under California law, judgment becomes final 17 upon resolution of appeal). 18 Federal courts must give full faith and credit to state court judgments under 28 U.S.C. 19 § 1738 and Article IV section 1 of the U.S. Constitution. “A clear and predictable res judicata 20 doctrine promotes judicial economy,” in that it “precludes piecemeal litigation by splitting a single 21 cause of action or relitigation of the same cause of action on a different legal theory or for 22 different relief.” Mycogen Corp. v. Monsanto Co., 28 Cal. 4th 888, 897 (2002). To determine 23 whether a state court judgment bars a federal action, a federal court must apply the res judicata 24 law of the state in which the judgment was entered. Migra v. Warren City Sch. Dist. Bd. of Educ., 25 465 U.S. 75, 81 (1984). Under California law, claim preclusion applies “only if (1) the decision in 26 the prior proceeding is final and on the merits; (2) the present action is on the same cause of action 27 as the prior proceeding; and (3) the parties in the present action or parties in privity with them 1 were parties to the prior proceeding.” Zevnik v. Superior Court, 159 Cal. App. 4th 76, 82 (2008). 2 “Res judicata not only bars issues actually litigated but also bars issues that could have been 3 litigated, as long as the later-raised issues constitute the same cause of action involved in the prior 4 proceeding.” Atwell v. City of Rohnert Park, 27 Cal. App. 5th 692, 698 (2018). Here, the 5 California state court decision satisfies all three elements of the res judicata analysis (at least with 6 respect to some of the claims asserted in the present action).3 7 1. Finality 8 First, the state court decision is final and on the merits. Glaude filed several amended 9 cross-complaints before the state trial court. Glaude, in these cross-complaints, brought claims for 10 wrongful foreclosure, unjust enrichment, breach of fiduciary duty,4 declaratory relief, and alleged 11 Deutsche Bank breached an oral agreement it made with him that “Glaude would have the option 12 to assume the loan if he made the mortgage payments.” Tinsley, 2020 WL 5087939, at *1–3. The 13 trial court gave Glaude multiple opportunities to amend his claims, and eventually sustained 14 Deutsche Bank’s demurrer to Glaude’s Fourth Amended Cross-Complaint and dismissed that 15 complaint with prejudice. Id.; see also Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788, 793 16 (2010) (dismissal with prejudice final judgment under California law). Glaude appealed this 17 dismissal, and the Court of Appeal affirmed. See id. Glaude’s petition for rehearing was denied, as 18 was his application to the Supreme Court of California for relief from default. 19 2. Same causes of action 20 Second, the present action brings several causes of action disposed of in the state court 21 proceedings. “To determine whether two proceedings involve identical causes of action for 22 23 3 Further, though Deutsche Bank is correct the First Federal Action was dismissed with prejudice, it likely should have been dismissed without prejudice since it was based on Rooker-Feldman 24 abstention. See Kelly v. Fleetwood Enters., 377 F.3d 1034, 1036 (9th Cir. 2004). A dismissal without prejudice is not a final adjudication on the merits and does not have res judicata effect. 25 Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 396 (1990). 26 4 Glaude claimed breach of fiduciary duty related to Deutsche Bank’s (1) refusal to “acknowledge him as successor-in-interest,” (2) refusal to accept Glaude’s payments, (3) wrongful notice of a 27 trustee’s sale. Tinsley, 2020 WL 5087939, at *1. 1 purposes of claim preclusion, California courts have consistently applied the primary rights 2 theory.” See Boeken, 48 Cal. at 797 (internal citation and quotations omitted). “[U]nder the 3 primary rights theory, the determinative factor is the harm suffered. When two actions involving 4 the same parties seek compensation for the same harm, they generally involve the same primary 5 right.” Id. at 798 (internal citation omitted). However, “different primary rights may be violated by 6 the same wrongful conduct.” Branson v. Sun-Diamond Growers, 24 Cal. App. 4th 327, 342 (Cal. 7 Ct. App. 1994). Claim preclusion “applies if the cause of action could have been brought, whether 8 or not it was actually asserted or decided in the first lawsuit.” Ivanoff v. Bank of America, N.A., 9 9 Cal. App. 5th 719, 727 (2017). 10 The state trial court sustained Deutsche Bank’s demurrers to Glaude’s claims for wrongful 11 foreclosure, unjust enrichment, and breach of a verbal agreement. Glaude, in pursuing these 12 claims, sought to remedy harms relating to foreclosure on the Property and Deutsche Bank’s 13 failure to honor an oral contract under which Glaude allegedly paid Deutsche Bank tens of 14 thousands of dollars. Glaude now brings several causes of action premised on the same harms 15 asserted in the State Action. Namely, Glaude claims negligent misrepresentation because of 16 Defendants’ “numerous misrepresentations with regards to their interest in the [P]roperty,”5 17 wrongful foreclosure, unjust enrichment, and seeks to quiet title. These causes of action seek relief 18 for the same harms asserted in the State Action. They revolve around the foreclosure on the 19 Property, misrepresentations connected with that foreclosure, and unjust enrichment resulting 20 from the foreclosure. Although Glaude’s unjust enrichment cause of action is based on a slightly 21 22 5 Glaude appears to bring several causes of action for negligent misrepresentation. He titles one such cause of action (Count VII) “Securities Fraud,” but then makes the same negligent 23 misrepresentation allegations (relating to Tinsley’s marital status) asserted in Count V. See Dkt. 3, at 13–14, 16–17. Glaude’s “Securities Fraud” claim is most accurately construed as yet another 24 repackaging of his wrongful foreclosure claim that is barred by res judicata. Even were this claim an attempt to remedy Defendants’ violation of a different primary right—such that res judicata 25 might not apply—it is plainly frivolous, fails to state a claim with any particularity, and is subject to dismissal. Glaude alleges, at most, Defendants were “aware” Tinsley was single. Id. at 17. He 26 does not come close to alleging any Defendant made a “false statement” or omitted information such that its statement was misleading in selling or offering a security, or that he purchased a 27 security within the meaning of the statute. See Cal. Corp. Code § 25401. 1 altered theory here than in the State Action (here, Glaude points to improvements he made on the 2 Property), the same injury is implicated, and Glaude could have asserted this theory in the state 3 action. 4 Glaude’s civil Racketeer Influenced and Corrupt Organizations (“RICO”) Act claim 5 (Count VIII) is also premised on the same harm—loss of the Property—as Glaude’s wrongful 6 foreclosure claim and is barred under the primary rights theory. See Laconico v. Cal-Western 7 Reconveyance Corp., No. 17-cv-698, 2017 WL 2877098, at *5 (N.D. Cal. July 6, 2017) (“Courts 8 have consistently found that actions challenging foreclosures implicate the same unitary harm.”). 9 Glaude could have raised this claim in the State Action.6 Thus, Counts II–VIII are precluded by 10 the State Action and must be dismissed without leave to amend, as res judicata would render any 11 amendment futile. 12 On the other hand, there is a colorable argument res judicata does not bar Glaude’s Truth 13 In Lending Act (“TILA”) claim (Count I). See, e.g., Greene v. U.S. Bank, N.A., No. 19-cv-7448, 14 2020 WL 1308343, at *5 (N.D. Cal. Feb. 5, 2020) (finding TILA claims not barred by res judicata 15 in home foreclosure action). Though Glaude, in his TILA cause of action, avers loss of the 16 Property as a harm, he also claims Defendants failed to “keep a truthful and accurate record of the 17 loan records” of the Property. A TILA violation causes injury by holding a party to different loan 18 terms than those to which they agreed, which is a separate harm than loss of property. 19 Nevertheless, Glaude’s TILA claim is subject to dismissal for reasons detailed below. 20 3. Same parties 21 Finally, the same parties—Glaude and Deutsche Bank—were involved in the State Action. 22 While Community Realty Property Management, Inc. and VMM Irrevocable Trust were not 23 24 6 Even were it not barred by res judicata, Glaude’s civil RICO claim fails for the independently 25 sufficient reason that the mere existence of residential foreclosure proceedings does not justify RICO claims. See Murphy v. Bank of N.Y. Mellon, No. 13-cv-2820, 2013 WL 5883675, at *4 26 (N.D. Cal. Oct. 30, 2013). Glaude’s RICO claim is supported by bare-bones averments, such as that Defendants “engaged in a pattern of misrepresentation and fraudulent conduct with the intent 27 of obtaining property unlawfully,” Dkt. 3, at 21, that are insufficient to state a civil RICO claim. 1 parties in the State Action, they are in privity with Deutsche Bank such that the third prong of res 2 judicata is satisfied. Privity exists where parties share sufficient “commonality of interest.” Tahoe- 3 Sierra Pres. Council, Inc. v. Tahoe Reg. Planning Agency, 322 F.3d 1064, 1081 (9th Cir. 2003) 4 (citation omitted). Here, Community Realty Property Management, Inc. and VMM Irrevocable 5 Trust appear to have been included as Defendants in this action solely because they were the third- 6 party buyers at the foreclosure sale for the Property. Courts in this District have found privity 7 where “a non-party succeed[s] to a party’s interest in property.” Neal v. Select Portfolio Servicing, 8 Inc., No. 20-cv-7127, 2021 WL 735666, at *5 (N.D. Cal. Feb. 25, 2021) (cleaned up). The parties 9 to this action are in privity for res judicata purposes. 10 C. TILA Claim 11 Glaude’s TILA claim, while perhaps not barred by res judicata, is subject to dismissal for 12 failure to state a claim sua sponte based on its facial inadequacy. See Sparling v. Hoffman Constr. 13 Co., 864 F.2d 635, 638 (9th Cir. 1988) (sua sponte dismissal appropriate where “[p]laintiffs 14 cannot possibly win relief” (alteration in original)). Glaude’s TILA claim, which seeks damages 15 under 15 U.S.C. § 1640, is clearly time-barred under the relevant one-year (from the date of the 16 violation) statute of limitations. See 15 U.S.C. § 1640(e). TILA claims accrue on the date a loan 17 transaction closes. Patague v. Wells Fargo Bank, N.A., No. 10-cv-3460, 2010 WL 4695480, at *2 18 (N.D. Cal. Nov. 8, 2010). The loan transaction to which Glaude refers in his Amended Complaint 19 took place in May 2005 (nearly two decades ago). Equitable tolling, moreover, cannot save 20 Glaude’s TILA claim where Glaude has been asserting the same “untruthful misrepresentations” 21 as the basis for the TILA claim in various courts for years. Equitable tolling may suspend a 22 limitations period “until the borrower discovers or had reasonable opportunity to discover the 23 fraud or nondisclosures that form the basis of the TILA action.” King v. California, 784 F.2d 910, 24 915 (9th Cir. 1986). There is no suggestion in the Amended Complaint that Glaude discovered the 25 fraud or nondisclosures of which he complains within even the past several years. Thus, sua 26 sponte dismissal of Glaude’s TILA claim is appropriate. 27 1 V. CONCLUSION 2 Deutsche Bank’s motion to dismiss is granted, and this action is dismissed as to all 3 || Defendants. Though Defendants Community Realty Property Management, Inc. and VMM 4 || Irrevocable Trust have not moved to dismiss Glaude’s claims against them, sua sponte dismissal 5 with respect to Glaude’s claims against these Defendants is appropriate as well because they are 6 || “ina position similar to that of [the] moving defendants.” Si/verton v. Dep’t of Treasury, 644 F.2d 7 1341, 1345 (9th Cir. 1981). Indeed, Glaude does not make specific averments implicating these 8 two Defendants at all in his Amended Complaint—they appear to have been added to the case 9 caption based on their position as third-party buyers of the Property. The action is dismissed 10 || without leave to amend as amendment would be futile. Glaude’s motions for a preliminary 11 injunction and judgment on the pleadings are denied as moot. 12 13 || ITISSO ORDERED. 14 15 || Dated: February 16, 2024 5 RICHARD SEEBORG _ ief United States District Judge 18 19 20 21 22 23 24 25 26 27 98 ORDER GRANTING MOTION TO DISMISS CASE No. 23-cv-05429-RS