LAWRENCE J. O'NEILL, Chief District Judge.
Pending before the Court are six motions to dismiss the complaint filed by Defendants Fresno County Superior Court ("FCSC") (Docs. 40, 42); Fresno County (erroneously sued as Fresno County Counsel representing Joshua Cochron and Fresno County Public Guardian (Doc. 43); UBS Financial Services ("UBS") and The Bank of New York Mellon ("BNY") (Doc. 44); Weintraub Genshlea Chediak Tobin & Tobin (erroneously sued as and herein referred to as "Weintraub Tobin") (Doc. 45); and Comerica, Inc. ("Comerica") (Doc. 46). Also pending is Beverly Pellegrini's ("Beverly") request to intervene. (Doc. 15.)
Having reviewed the parties' briefs and all supporting documents, the Court found these motions suitable for decision without oral argument, and the hearing set for April 10, 2017, was vacated. For the reasons set forth below, Defendants' motions to dismiss are GRANTED, and Beverly Pellegrini's motion for intervention is DENIED.
This case stems from a trust administration dispute between Lillian Pellegrini ("Lillian") and her daughter, Marleen Merchant ("Marleen"), which was decided in a probate proceeding conducted by the FCSC, Case No. 10CEPR00683. Lillian appealed the FCSC judgment, and the Fifth District Court of Appeal (the "Fifth DCA") affirmed the FCSC judgment on October 31, 2016. Lillian filed a petition for review in the California Supreme Court, which was summarily denied on January 11, 2017. The FCSC judgment is now final.
Angelo John Pellegrini (Angelo) and Lillian, as husband and wife, executed what the Fifth DCA termed a "fairly standard revocable living trust" on June 18, 1999. As described by the Fifth DCA,
Merchant v. Pellegrini, No. F072656, 2016 WL 6426389, at * 1-2 (Oct. 31, 2016) (unpublished).
In her complaint before this Court, Lillian alleges a different operation of the 1999 Trust. After inheriting money from Lillian's siblings Mike and Gladyce, Lillian and her husband Angelo created the Angelo Pellegrini and Lillian Dorothy Pellegrini Revocable Living Trust on June 18, 1999 (the "1999 Trust"). (Cmplt., p. 62.)
In 2004, Angelo and Lillian amended the distribution clause of the Family Trust on the surviving spouse's death permitting a life estate to Beverly in the Trust's residential property, if then unsold. (Cmplt., p. 63, Exh. 3.) Two amendments "left the Family Trust void of any beneficiary designation, rendering the Family Trust a nullity and an invalid trust." (Id.)
In March 2008, Angelo died. Pursuant to the Trust terms, Lillian maintained unrestrained power of sale, and she sold the San Francisco real property within six months of Angelo's death, distributing the proceedings to her Survivor's Trust. Shortly after this sale in 2008, Lillian revoked the Trust. (Cmplt., p. 63, Exh. 3.) Lillian also claims that in 2008, a Marital and Survivor's trust were funded, which she claims implied that the Family Trust was not intended to be funded on the first spouse's death. (Cmplt., p. 14:5-11.) Lillian asserts subsequent amendments to the 1999 Trust were made in 2010, which rendered the Family Trust "void and a nullity for lack of any beneficiary designation on the Surviving Settlor's eventual death." (Cmplt., p. 16:17-20.)
In July 2010, Marleen successfully petitioned the FCSC for an order compelling Lillian to provide an accounting of assets as of the time of Angelo's death and to provide information on how the assets were allocated between the Survivor's Trust, the Marital Trust, and the Family Trust. Lillian filed a statement of trust assets as of March 27, 2008. Among the assets purportedly allocated to the Family Trust was one-half of the $800,000 value of a San Francisco residence. The total value of assets that Lillian, through her attorney, represented to have been allocated to the Family Trust was $544,386.91. In 2011, these representations regarding the Family Trust were repudiated by Lillian in a letter written by her in response to a request by Marleen's attorney for further information and accounting concerning the Family Trust. Lillian stated that there were no assets in the Family Trust and no assets were ever allocated or distributed to a Family Trust.
Purportedly based on this letter, in July 2012, Marleen filed a petition to remove Lillian as trustee, appoint a successor trustee, and obtain other relief. On January 13, 2014, Marleen filed an additional petition seeking the recovery of property belonging to the Family Trust, for an award of double damages under Probate Code § 859, and for an award of attorney's fees.
On June 17, 2014, the FCSC granted a motion to bifurcate the trial and determined two issues would be tried first: (1) whether the Family Trust was required to be funded after Angelo's death, and (2) whether the title to real property in San Francisco maintained its joint tenancy characterization after being transferred into the 1999 Trust. (See Doc. 44-2, pp. 170-72, Exh. 16.) On January 14, 2015, a trial was conducted on these two issues, and the FCSC determined by clear and convincing evidence that the Family Trust was required to be funded following the death of Angelo with a minimum of $544,386.91. (Id.) The FCSC also found the San Francisco real property did not maintain its joint tenancy characterization after being transferred to the 1999 Trust. (Id.)
In May 2015, after holding a hearing, the trial court ordered the removal of Lillian as trustee of the Family Trust for failing to fund it after Angelo's death, and it appointed the Fresno County Public Guardian as the successor trustee. (Doc. 44-2, pp. 42-43, Exh. 2.) The May 2015 order also directed Lillian to fund the Family Trust in the amount of $544,386.91, and to pay this amount to the Public Guardian. (Id.) As to all remaining issues, a one-day court trial was set for August 25, 2015. (Id.)
On trial of the remaining issues in August 2015, the trial court found that Lillian wrongfully and in bad faith took assets belonging to the Family Trust, and double damages were awarded pursuant to California Probate Code § 859 which Lillian was ordered to pay to the Public Guardian. (Doc. 44-2, pp. 45-47, Exh. 3.) Lillian was also ordered to pay Marleen's attorney's fees through the Public Guardian. In total, Lillian was ordered to pay $1,528,271.44 to the Public Guardian. (Id.)
On October 14, 2015, Lillian filed a document in the U.S. District Court for the Eastern District of California entitled "Request for Transfer to Federal Court 28 U.S.C. § 1441," which was construed as a notice of removal of the trial court proceedings over which this Court determined it had no jurisdiction; the case was remanded to the FCSC sua sponte less than one week later. (Doc. 44-2, pp. 49-84, Exh. 4; 1:15-cv-01564-LJO-EPG, Doc. 1.)
On October 19, 2015, the Public Guardian filed an ex parte application seeking to enforce FCSC's order requiring Lillian to fund the Family Trust and pay Marleen's attorney's fees through the Public Guardian and to freeze Lillian's UBS accounts. (Doc. 44-2, pp. 159-60, Exh. 13.)
On October 20, 2015, FCSC granted the Public Guardian's motion, froze Lillian's accounts at UBS until further order, and required UBS to transfer the sum of $1,528,271.44 to the Public Guardian. (Doc. 44-2, pp. 156-57, Exh. 12.) Lillian then appealed the trial court's orders to the Fifth DCA on November 15, 2015. (Doc. 44-2, p. 93, Exhibit 6). On November 16, 2015, FCSC issued an ex parte order granting full authority to the Public Guardian to liquidate assets from Lillian's UBS accounts. (Doc. 44-2, p. 162 (Exh. 14).)
On November 16, 2015, Lilian filed a "Request for Writ of Supersedeas []," and the Fifth DCA issued a temporary stay of FCSC's October 20, 2015, and November 16, 2015, ex parte orders in the underlying case. (Doc. 44-2, p. 93 (Exhibit 6).) On December 4, 2015, the Fifth DCA issued an order clarifying FCSC's October 20, 2015, ex parte order "freezing accounts held in the name of Lillian Dorothy Pellegrini at UBS Financial Services, Inc." remained enforceable "insofar as it directs that 'no transfers or withdrawals shall be made from the [specified] account[s] until further order of the Court.'" (Id.)
On December 19, 2015, Lillian filed a "Request to Respond to Answer," and on January 6, 2016, Lillian filed a "Motion to Decide Writ of Prohibition." (Id. at pp. 96-97.) On January 19, 2016, the Fifth DCA issued the following order regarding Lillian's motions:
(Doc. 45-2, p. 8.)
On October 31, 2016, the Fifth DCA issued an order affirming FCSC's judgment. (Doc. 45-2, p. 10-45.)
Prior to the Fifth DCA's October 2016 decision, Lillian filed suit in August 2016 in the U.S. District Court for the Northern District of California naming as defendants Fresno County, Fresno County Counsel, Fresno County Public Guardian, FCSC, UBS, BNY, Comerica, and "Weintraub Tobin." Lillian alleges the probate proceedings before FCSC were void for lack of jurisdiction, various Defendants committed fraud on the court because they knew no Family Trust ever existed, FCSC denied Lillian due process by failing to provide her notice of hearings and an opportunity to be heard; and the Public Guardian, Weintraub Tobin, UBS, Comerica, and BNY were all complicit with and participated in the fraudulent conveyance and conversion of Lillian's trust assets held in UBS accounts. Lillian also alleges UBS breached her privacy in providing information to the Public Guardian without her consent.
On August 30, 2016, the Northern District sua sponte determined venue was improper there and transferred the case to the Eastern District where it determined venue was proper, finding that Lillian's claims arose out of events that occurred in Fresno, California. (Doc. 9.)
On October 31, 2016, Lillian filed a document entitled "Motion to Notify Court of a Conflict of Interest by Lillian Pellegrini" — construed as seeking disqualification of the undersigned — and a second document was filed by Lillian's daughter, Beverly Pellegrini, entitled "Notice — Federal Jurisdiction Under Federal Rule of Civil Procedure 60; Intervenor by Right Under Federal Rule of Civil Procedure 24; Joinder Under Federal Rules of Civil Procedure 19." (Docs. 14, 15.)
On November 3, 2016, Lillian was ordered to serve the complaint, and Beverly's motion entitled "Notice — Federal Jurisdiction Under Federal Rule of Civil Procedure 60; Intervenor by Right Under Federal Rule of Civil Procedure 24; Joinder Under Federal Rules of Civil Procedure 19" ("request to intervene") was held in abeyance until such time as the Defendants were served and the motion was properly re-noticed. (Doc.16.) Between December 27, 2016, and January 9, 2017, each Defendant filed a motion to dismiss. (Docs. 40, 42, 43, 44, 45, 46.)
On January 12, 2017, Lillian filed a motion for venue change and a motion to stay the proceedings. (Docs. 53, 54.) On February 14, 2017, the Court denied Lillian's motions to transfer venue, stay the proceedings, and to disqualify the undersigned. (Doc. 76.) The Court did not reach Beverly's October 2016 request to intervene as it had never been re-noticed for a hearing and was not properly before the Court.
On February 24, 2017, Beverly filed a "notice of appeal" seeking immediate appeal of the Court's refusal to reach her request to intervene. (Doc. 80.) As Beverly's motion was never properly re-noticed or set for a hearing and no order had therefore been issued regarding the matter of intervention that could be appealed, the Court construed Beverly's "notice of appeal" as a motion for an order on her request to intervene. (Doc. 81.) The Court set a hearing on this request, supplied the parties with a briefing schedule, and continued Defendants' motions to dismiss to be heard concurrently with Beverly's request to intervene. (Doc. 81.)
Defendants UBS, Weintraub, and Fresno County each seek judicial notice of various court documents. (Docs. 43-2, 44-2, 43-2, 57, 97.)
Under the Federal Rules of Evidence, "[a] judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). "The court . . . must take judicial notice if a party requests it and the court is supplied with the necessary information." Fed. R. Evid. 201(c)(2).
Rule 12(d) provides that if "matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d). However, there are two exceptions to this rule: a court may consider material (1) which is properly submitted as part of the complaint, or (2) matters of public record that have been judicially noticed. Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001).
As orders of the court or documents filed with a court, all the documents identified by Fresno County, UBS, and Weintraub Tobin are subject to judicial notice as matters of public record. Harris v. Cnty. of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012). The truth or the correctness of the factual content of these documents may not be judicially noticed, but the existence of the document or order and what the particular document states are subject to judicial notice. Lee v. City of L.A., 250 F.3d 668, (9th Cir. 2001) (court may take judicial notice of another court's opinion, but not for the truth of the facts recited therein, but for the existence of the opinion).
Lillian argues the Court may not take judicial notice of these documents without converting Defendants' motions to dismiss into motions for summary judgment, but this is incorrect. Judicial notice of public documents is one of the long-standing exceptions to Rule 12(d)'s prohibition on considering documents outside the pleadings in relation to a motion to dismiss. Lee, 250 F.3d at 688-89. Defendants' requests for judicial notice are GRANTED.
All Defendants except Comerica assert the Court lacks subject matter jurisdiction over Lillian's claims under the Rooker-Feldman doctrine, and they argue dismissal is required pursuant to Federal Rule of Civil Procedure 12(b)(1). Defendants contend Lillian's claims amount to an impermissible collateral attack on FCSC's judgments.
"As courts of original jurisdiction, federal district courts have no authority to review the final determinations of a state court in judicial proceedings." Branson v. Nott, 62 F.3d 287, 291 (9th Cir. 1995) (citing Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983)); Worldwide Church of God v. McNair, 805 F.2d 888, 890 (9th Cir. 1986). "This is true even when the challenge to a state court decision involves federal constitutional issues." Id. (citing Feldman, 460 U.S. at 484-86; Worldwide Church of God, 805 F.2d at 891). This is so because, pursuant to 28 U.S.C. § 1257, the power to review a state court's judgment lies solely with the United States Supreme Court, not with federal district courts. Feldman, 460 U.S. at 476. In other words, "[t]he Rooker-Feldman doctrine merely recognizes that 28 U.S.C. § 1331 is a grant of original jurisdiction, and does not authorize district courts to exercise appellate jurisdiction over state-court judgments." Verizon Md. Inc. v. Public Serv. Comm'n of Md., 535 U.S. 635, 644 n. 3 (2002).
The Rooker-Feldman doctrine has been subject to criticism as overused and little understood.
In its most recent application by the Ninth Circuit Court of Appeals, a case cited with approval by the Supreme Court in Exxon, the Rooker-Feldman doctrine was held not to apply. Noel v. Hall, 341 F.3d 1148 (9th Cir. 2003). In Noel, the court observed that in its routine application, Rooker-Feldman is "exceedingly easy." Id. at 1155. However, the doctrine "becomes difficult — and, in practical reality, only comes into play as a contested issue — when a disappointed party seeks to take not a formal direct appeal, but rather its de facto equivalent, to a federal district court." Id.
The court explained that it "is a forbidden de facto appeal under Rooker-Feldman when the plaintiff in federal district court complains of a legal wrong allegedly committed by the state court, and seeks relief from the judgment of that court." Id. at 1163. A forbidden de facto appeal is brought in two kinds of cases: (1) where a "federal plaintiff complains of harm caused by a state court judgment that directly withholds a benefit (or imposes a detriment on) the federal plaintiff, based on an allegedly erroneous ruling by the court"; and (2) where a federal plaintiff complains "of a legal injury caused by a state court judgment, based on an allegedly erroneous legal ruling, in a case in which the federal plaintiff was one of the litigants." Id.
This litigation fits into the second type of case identified in Noel, and despite some of the noted difficulties and narrow scope of the Rooker-Feldman doctrine, it is applicable here. To determine whether Rooker-Feldman deprives the court of subject matter jurisdiction, "the immediate inquiry is whether the federal plaintiff seeks to set aside a state court judgment or whether he is, in fact, presenting an independent claim." Taylor v. Fed. Nat'l Mortg. Ass'n, 374 F.3d 529, 531 (7th Cir. 2004). "Claims that directly seek to set aside a state court judgment are de facto appeals and are barred without additional inquiry." Id. Federal claims that were not raised in state court or that do not, on their face, require review of a state court's decision may still be subject to Rooker-Feldman if those claims are inextricably intertwined with a state court judgment. Id.
Lillian's injury for all Defendants' alleged conduct is the loss of UBS account assets resulting from FCSC's order that she pay $1,528,271.44 to the Family Trust through the Public Guardian. Lillian states she has sought a "dismissal" through the FCSC and the Fifth DCA before the order for payment was issued by the FCSC, but due to failures of due process and "through the courts' negligence, the property has been stolen and dismissal is too late." (Cmplt., p. 42:18-23.) Lillian maintains her "only remedy" now is to demand payment "of the full claim." Lillian asks this Court to enter a "default judgment" in her favor, and then order UBS to replace all her assets and reimburse Lillian for the associated costs, liabilities, and interest.
Although Lillian generally alleges violations of due process, and makes reference to fraud and conversion, none of her claims are pled distinctly as causes of action against particular Defendants. Rather, her complaint is an amalgamation of the various reasons why the FCSC lacked jurisdiction over her trust, made incorrect legal determinations, and issued a judgment and orders that are void due to fraud on the court. Lillian's alleged injury from all Defendants' conduct is one in the same: Lillian's UBS accounts were levied to pay $1,528,271.44 to the Family Trust pursuant to the FCSC order; the remedy she seeks is return of the $1,528,271.44 plus additional costs and interest.
Parsing Lillian's allegations into distinct claims, including claims for due process violations against the FCSC as well as fraud and conversion claims against the remaining Defendants, these claims are inextricably intertwined with the state court judgment and therefore are also barred under Rooker-Feldman. In Feldman, the Court expanded the doctrine to include claims that were inextricably intertwined with the state court's ultimate decision. Feldman, 460 U.S. at 486-87. Inextricably intertwined claims are those that would necessarily require the district court to review a judicial decision of a state court, something the district court has no jurisdiction to do.
Since Feldman, lower federal courts have formulated different criteria and rules for determining which claims are "inextricably intertwined" with the state court's judgment such that Rooker-Feldman applies. The Ninth Circuit has embraced the GASH approach, named for the Seventh Circuit decision formulating the approach, to determine whether claims are "inextricably intertwined." Noel, 341 F.3d at 1164 (citing GASH Assocs. v. Village of Rosemont, 995 F.2d 726 (7th Cir. 1993) ("Of the formulations in the other circuits, we find most notable (and most useful) the similar formulation of the Seventh Circuit, first articulated at some length by Judge Easterbrook in [GASH]")). Under this approach, whether a claim is "inextricably intertwined" "hinges on whether the federal claim alleges that the injury was caused by the state court judgment, or, alternatively, whether the federal claim alleges an independent prior injury that the state court failed to remedy." Taylor, 374 F.3d at 533; GASH, 995 F.2d at 728-29. Thus, if a plaintiff is not seeking to set aside the state court judgment but rather presents "some independent claim," even if it is one that denies a legal conclusion that a state court has reached in a case to which he was a party, then Rooker Feldman does not apply and the federal court has jurisdiction. Taylor, 374 F.3d at 533.
Although Lillian asserts due process violations by the courts and the judges involved in the underlying Probate proceedings,
Lillian's claims against Fresno County, UBS, BNY, Comerica, and Weintraub Tobin for fraud and conversion are somewhat more difficult, in part because the allegations are scattered, vague, and conclusory. Some allegations relate to these Defendants' compliance with the FCSC order that the Family Trust be funded from Lillian's UBS account assets. Lillian alleges that UBS, BNY, and Comerica refused to stop the payment from her UBS account when she requested it, and that this constituted conversion. (Cmplt., pp. 27-30, 38-39.) Lillian also alleges generally that in providing her account information to the Public Guardian and in freezing her account prior to a court order to do so, UBS breached its duties of privacy and breached a contract. In essence, however, these allegations stem from the FCSC's orders removing Lillian as trustee of the Family Trust, freezing Lillian's UBS accounts, and ordering distribution of Lillian's assets to the Family Trust via the Public Guardian. An element of these claims necessarily requires that the FCSC orders executing its judgment were somehow void or invalid, thus implicating the underlying state court judgment. Even to the extent Lillian alleges UBS froze her accounts before an order was in place to do so or otherwise impermissibly divulged information to the Public Guardian, the only damage she alleges as a result of this conduct is the loss of assets from her UBS account — which is directly tied to the FCSC order that she fund the Family Trust by making payment to the Public Guardian. Moreover, the allegation that information was provided to the Public Guardian regarding her UBS accounts is fundamentally connected to the FCSC order appointing the Public Guardian successor trustee of the Family Trust and implicates the Public Guardian's rights and obligations as successor trustee to seek financial information. Lillian vigorously contends the FSCS order appointing the Public Guardian as trustee was invalid, impermissible, and otherwise in violation of her rights. Analyzing these allegations will necessitate an evaluation of FCSC's order that Lillian pay UBS trust assets to the Public Guardian. These claims are inextricably intertwined with the FCSC judgment.
Another portion of the allegations against Fresno County, Weintraub Tobin, and UBS relate to fraud on the court and alleged misrepresentations these Defendants made to the FCSC or the Fifth DCA regarding the nature of the Family Trust. (See, e.g., Cmplt., p. 28:23-26 (UBS colluded with Weintraub Tobin and Fresno County); p. 18:26-19:24) ("Weintraub Tobin knowingly and falsely claimed" in a 2012 petition that the Family Trust was created, and then claimed in a brief filed before the Fifth DCA that the trust was "supposed" to have been created, evidencing the misrepresentation in 2012).)
This is very similar to fraud-on-the-court claims considered by the Seventh Circuit in Taylor, 374 F.3d at 533. There, the plaintiff-appellant, Taylor, lost her home in a judicial foreclosure action. Rather than directly appealing the state court judgment, Taylor filed a separate suit alleging the defendant mortgage company and its law firm committed extrinsic fraud and fraud upon the court by instituting wrongful foreclosure actions against her in violation of federal statutes. The defendants removed the case to federal court where it was dismissed for lack of jurisdiction under Rooker-Feldman. On appeal, the court held Taylor's alleged injuries did not stem from an independent violation of her rights, but from the alleged extrinsic fraud upon the state court and intentional deprivation of her property that she claimed occurred due to that violation. As such, the claims were inextricably intertwined with the state court's judgment and barred by Rooker-Feldman.
Like Taylor, Lillian's allegations of fraud on the court do not arise from an independent violation of her rights, but from the court processes she claims were in violation of her rights and from purported misrepresentations various Defendants made in characterizing to FCSC the nature of the 1999 trust and the trust assets. Notably, Lillian also alleges that FCSC knew about the fraud and was complicit with it — which intertwines all the fraud allegations with the FCSC's orders and judgment. (Cmplt., 20:26-21:2.) There is no way to examine the alleged fraud on the court without evaluating FCSC's underlying legal determinations. See Worldwide Church of God, 805 F.2d at 892-93 (impossible to evaluate constitutional claims without conducting review of state court's legal determinations and jury verdict, thus Rooker-Feldman applied to constitutional claims). Lillian's allegations of fraud on the court against Fresno County, UBS, Weintraub Tobin are inextricably intertwined with FCSC's legal determinations and its judgment.
Because Lillian's complaint amounts to a de facto appeal of FCSC's legal determinations in the underlying probate matter, and because all other allegations that can be construed as claims against various defendants are inextricably intertwined with FCSC's legal determinations and judgments, the Court finds it lacks subject matter jurisdiction over Lillian's complaint under the Rooker-Feldman doctrine, and it is DISMISSED.
As the Court finds it is without subject matter jurisdiction over Lillian's complaint, there can be no jurisdiction over any complaint in intervention filed by Beverly. See Canatella v. California, 404 F.3d 1106, 1113 (9th Cir. 2005) (intervention as of right cannot extend federal jurisdiction); Mattice v. Meyer, 353 F.2d 316 (8th Cir. 1965) (where no action was pending since plaintiff was without standing to initiate an action, person who sought to intervene as co-plaintiff could not complain on appealed that he was not allowed to do so); Hobbs v. Police Jury of Morehouse Parish, 49 F.R.D. 176 (D. La. 1970) (intervenor takes case as he finds it and may not intervene if there is no proper suit before the court); see also 7C Fed. Prac. & Proc. § 1917 (3d ed.) (2017) (intervention presupposes the pendency of an action in a court of competent jurisdiction and cannot create jurisdiction if one existed before).
Even if there were jurisdiction over some claim in Lillian's complaint, for all the reasons set forth below, the request for intervention is DENIED.
Aside from the jurisdictional issue, the Court notes the procedural awkwardness of Beverly's request to intervene. Beverly is not eligible to represent Lillian before this Court because she is not admitted to the California Bar, and she is not eligible to practice before this Court pro hac vice. Nevertheless, Beverly continues to draft and file all Lillian's papers in this case:
(Doc. 15, 9:19-27.)
At the February 13, 2017, hearing on Lillian's motions to stay, to transfer venue, and to disqualify the undersigned, the Court explained to Lillian that if she were unable to represent herself, she would need to retain counsel, which could not be her daughter Beverly. The request to intervene is signed by both Beverly and Lillian, and they both request that "the District Court grant the motion for intervention by right or in the alternative, grant joinder under Federal Rule 19 to permit Beverly Pellegrini" to participate in the litigation. (Doc. 15, 10:27-11:2.) It appears some of the motivation to intervene stems from Lillian's purported inability to represent herself in pro se.
The request to intervene first asserts the Court has jurisdiction over claims of an intervenor under 28 U.S.C. §1367, and then asserts the Court has jurisdiction under Federal Rule of Civil Procedure 60 due to "fraud on the Court that was perpetrated with an intent and knowledge to steal property from Lillian Pellegrini." (Doc. 15, 2:2-3.)
Beverly and Lillian request that Beverly be permitted to intervene as a matter of right or that she be joined under Rule 19. The basis for this request is articulated, in relevant part, as follows:
(Doc. 15, 8:3-23.) Lillian and Beverly maintain that Beverly's intervention is necessary to protect Beverly's interests as a beneficiary of the trust, and, on her own, Lillian lacks the legal and physical skills necessary to adequately defend Beverly's interests.
Federal Rule of Civil Procedure 24(a)(2) provides for intervention as of right where the potential intervenor "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impeded the movant's ability to protect its interest, unless existing parties adequately represent that interest." The Ninth Circuit has articulated four requirements for intervention as of right under Rule 24(a)(2):
Freedom from Religion Found v. Geithner, 644 F.3d 836, 841 (9th Cir. 2011) (quoting Cal. Ex rel. Lockyer v. United States, 450 F.3d 436, 440 (9th Cir. 2006)). Proposed intervenors must meet all four criteria, and "[f]ailure to satisfy any one of the requirements is fatal to the application." Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 950 (9th Cir. 2009). In evaluating motions to intervene, "courts are guided primarily by practical and equitable considerations, and the requirements for intervention are broadly interpreted in favor of intervention." United States v. Alisal Water Corp., 370 F.3d 915, 919 (9th Cir. 2004). "Courts are to take all well-pleaded, nonconclusory allegations in the motion to intervene, the proposed complaint or answer in invention, and the declarations supporting the motion as true absent sham, frivolity or other objections." Sw. Ctr. For Biological Diversity v. Berg, 268 F.3d 810, 820 (9th Cir. 2001).
Under Federal Rule of Civil Procedure 24(b)(1), "[o]n timely motion, the court may permit anyone to intervene who . . . has a claim or defense that shares with the main action a common question of law or fact." Permissive intervention "requires (1) an independent ground for jurisdiction; (2) a timely motion; and (3) a common question of law and fact between the movant's claim or defense and the main action." Freedom from Religion Found., 644 F.3d at 843 (quoting Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.3d 470, 473 (9th Cir. 1992)). "Even if an applicant satisfies those threshold requirements," however, "the district court has discretion to deny permissive intervention." Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998). "In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." Fed. R. Civ. P. 24(b)(3). "[T]he court may also consider other factors in the exercise of its discretion, including 'the nature and extent of the intervenors' interests' and 'whether the intervenors' interests are adequately represented by other parties.'" Perry, 587 F.3d at 955 (quoting Spangler v. Pasadena City Bd. Of Educ., 552 F.2d 1326, 1329 (9th Cir. 1977)).
Both permissive and intervention as of right motions must be served on all parties, "[t]he motion must state the grounds for intervention and be accompanied by a pleading that sets out the claim or defense for which intervention is sought." Fed. R. Civ. P. 24(c).
Federal Rule of Civil Procedure 15(a)(2) requires the court to "freely give" leave to amend a pleading "when justice so requires." Fed. R. Civ. P. 15(a)(2). This policy is "applied with extreme liberality." Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001). It is within the court's discretion whether to grant or deny leave to amend. United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). "In exercising this discretion, a court must be guided by the underlying purpose of Rule 15 to facilitate a decision on the merits, rather than on the pleadings or technicalities." Id. In considering requests to amend, courts analyze the following factors: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether plaintiff has previously amended her complaint. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990).
Initially, no matter how the October 2016 request is construed — whether as a motion to intervene or a motion to amend the complaint to add Beverly as a plaintiff — the motion is defective. Any motion for intervention under Rule 24 requires the motion to "be accompanied by a pleading that sets out the claim or defense for which intervention is sought." Fed. R. Civ. P. 24(c). No proposed pleading has been submitted to the Court. Lillian and Beverly's request indicates that, if Beverly is permitted to intervene, an addendum to the complaint "will include" causes of action under 18 U.S.C. §§ 1961, 1962, 1956, and 1957,
The same is true of a motion to amend the complaint to name Beverly as a plaintiff. Rule 137(c) of the Local Rules for the U.S. District Court, Eastern District of California, states in pertinent part that, "[i]f filing a document requires leave of court, such as an amended complaint after the time to amend as a matter of course has expired, counsel shall attach the document proposed to be filed as an exhibit to the moving papers seeking such leave." The Court has discretion to deny a motion to amend for failure to attach a proposed pleading as required by local rule. Waters v. Weyerhaeuser Mortgage Co., 582 F.2d 503, 507 (9th Cir. 1978). As noted above, Beverly has failed to attach a proposed amended complaint or describe the new claims in sufficient detail. A court's ability to evaluate the propriety of a motion to amend a pleading is hampered when the moving papers do not describe the proposed amendments in sufficient detail or attach the proposed amended pleading. United States v. Molen, No. 2:10-cv-02591-MCE-KJN, 2011 WL 3678431, at *2 (E.D. Cal. Aug. 22, 2011). As either a request for intervention or a motion to amend, the request is procedurally deficient without a proposed pleading.
In considering the intervention of right factors set forth by the Ninth Circuit in Geithner, 644 F.3d at 841 the motion is timely as the pleadings have not closed and no schedule has yet been set. Given this posture, Beverly's intervention does not pose a risk of undue prejudice to Defendants. See United States v. Oregon, 745 F.2d 550, 552 (9th Cir. 1984).
The second factor, whether the applicant has a significant protectable interest, is fatal to the request. An applicant seeking intervention has a significant protectable interest in an action if (1) she asserts an interest that is protected under some law, and (2) there is a "relationship between its legally protected interest and the plaintiff's claims." Nw. Forest Resource Council v. Glickman, 82 F.3d 825, 837 (9th Cir. 1996). In addition, an applicant to intervene must be "so situated that disposing of the action may as a practical matter impair or impede" her ability to protect her interest. Fed. R. Civ. P. 24(a)(2). Beverly claims that she is a co-trustee with Lillian, and she is also a beneficiary of the trust. However, these allegations are conclusory — there is no allegation when Beverly was made co-trustee, of what particular trust she is co-trustee, or of what trust she is beneficiary.
Moreover, even assuming Beverly has a significant protectable interest, Beverly and Lillian have not shown that Lillian will not adequately represent Beverly's interests. Courts consider three factors in assessing whether the present party will adequately represent the interests of the proposed intervenor: (1) whether the interest of present party is such that it will undoubtedly make all of a proposed intervenor's arguments; (2) whether the present party is capable and willing to make such arguments; and (3) whether a proposed intervenor would offer any necessary elements to the proceeding that other parties would neglect. Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003). The "most important factor in determining adequacy of representation is how the interest compares with the interests of the existing parties. When an applicant for intervention and an existing party have the same ultimate objective, a presumption of adequacy of representation arises." Id.
Beverly and Lillian's argument as to adequacy of representation focuses on Lillian's physical limitations that preclude her from representing herself and the inability to locate and retain counsel. This is essentially an argument that, although Beverly is ineligible to represent her mother before this Court, Beverly wishes to become a party so she can litigate the case on her own and Lillian's behalf. Under these circumstances, Beverly has not established Lillian is unwilling or legally incapable of making all Beverly's arguments with regard to the claims regarding Lillian's trust. Rather, Lillian "lacks legal skill and acumen to be able to prepare and file her own papers by herself." If that is true, Lillian cannot proceed pro se with the case — adding Beverly to the suit as a plaintiff does not cure Lillian's inability to represent herself. Intervenor is not a mechanism whereby an unrepresented plaintiff hands off her case to another party to litigate it on her behalf. There is no showing that Beverly's interests diverge from Lillian in some way that requires Beverly's presence in the litigation. For these reasons, Lillian and Beverly's request to intervene as of right is both substantively and procedurally flawed and cannot be granted.
These same deficiencies preclude Beverly's request for permissive intervention. It is not clear how Beverly's interests diverge from that of her mother, such that Beverly needs to intervene to protect her own interests. Without a proposed amended complaint, the jurisdictional basis of the complaint in intervention is not ascertainable, and the Court cannot evaluate the viability of any claims under RICO Beverly states she wishes to file. Both procedurally and substantively, the request for permissive intervention is defective and cannot be granted.
Finally, even construing this filing as a motion to amend the complaint simply to add Beverly as a plaintiff, the request cannot be granted. While amendment to the complaint should be freely granted, where the amendment is futile a request to amend will not be granted. Chang v. Chen, 80 F.3d 1293, 1296 (9th Cir. 1996). For the reasons discussed below, Lillian's claims are not viable, even assuming the Court has subject matter jurisdiction. Beverly will be precluded from litigating these claims to the same degree as Lillian, and thus amending the complaint to add her as a party is futile. With respect to additional claims Beverly wishes to file against Defendants under RICO, those claims were not properly presented to the Court in the form of a proposed amended complaint. For all the reasons set forth above, Beverly and Lillian's request to intervene is DENIED.
The Court finds it lacks subject matter jurisdiction over Lillian's claims as a de fact appeal of the FCSC judgment in the underlying probate matter prohibited by Rooker-Feldman. Even if the Court had jurisdiction over any of Lillian's claims, however, none are viable, and Defendants' motions to dismiss must be granted.
A motion to dismiss pursuant to Rule 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. Dismissal under Rule 12(b)(6) is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balisteri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the pleader's favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
To survive a 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the Plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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." Id. (quoting Twombly, 550 U.S. at 556). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions." Twombly, 550 U.S. at 555 (internal citations omitted). Thus, "bare assertions . . . amount[ing] to nothing more than a 'formulaic recitation of the elements'. . . are not entitled to be assumed true." Iqbal, 556 U.S. at 681. "[T]o be entitled to the presumption of truth, allegations in a complaint . . . must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In practice, "a complaint . . . must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562. To the extent that the pleadings can be cured by the allegation of additional facts, a plaintiff should be afforded leave to amend. Cook, Perkiss and Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).
Beyond the jurisdictional argument under Rooker-Feldman, FCSC contends Lillian's claims against it are barred by the Eleventh Amendment of the U.S. Constitution and precluded by judicial immunity; moreover, even if Lillian's claims were somehow cognizable, they must be dismissed for failure to comply with the California Government Claims Act. (Doc. 42-1.)
Lillian's claims against FCSC, as can be cobbled together from the amorphous allegations of the complaint, relate entirely to FCSC's adjudication of the trust administration issues that arose in In re The Angelo John Pellegrini and Lillian Dorothy Pellegrini Revocable Living Trust, dated June 18, 1999, Case. No. 10CEPR00683, Fresno County Superior Court. Lillian alleges FCSC acted without any jurisdiction over the 1999 Trust and its orders where therefore void; FCSC was without jurisdiction to appoint a trustee over the Family Trust, since that trust never existed (Cmplt., 24:1-4); it violated rules of due process by granting and imposing injunctions without notice or a hearing (Cmplt., 21:24-28, pp. 23-24); and it was without any jurisdiction to order UBS to furnish Lillian's account information or to freeze and levy Lillian's UBS account (Cmplt., pp. 24-25). Lillian also alleges FCSC "facilitated the fraud" by denying due process in issuing rulings before trials or hearings took place, denying Beverly Pellegrini a chance to be heard or permitted to be present at hearings; ignored evidence related to the existence of the Family Trust; and lacked any authority to issue orders regarding Lillian's trust property. (Cmplt., pp. 31-35.)
FCSC contends the Eleventh Amendment bars suits seeking either damages or injunctive relief against a state, an arm of the state, its instrumentalities, or its agencies. State courts are state entities for the purposes of the Eleventh Amendment, and thus FCSC maintains it is immune from Lillian's claims which arise out of its official actions in adjudicating the underlying trust administration proceedings. The Court agrees.
Put simply, Lillian can state no claim against FCSC (or its employees) pertaining to its adjudication of her trust in probate proceedings because such suits are barred by the Eleventh Amendment. Simmons v. Sacramento, 318 F.3d 1156, 1161 (2003) (citing Will v. Mich. Dep't of State Police, 491 U.S. 58, 70 (1989) (holding that "`arms of the State' for Eleventh Amendment purposes" are not liable under § 1983)); Greater L.A. Council on Deafness, Inc. v. Zolin, 812 F.2d 1103, 1110 (9th Cir. 1987) ("We conclude that a suit against the Superior Court is a suit against the State, barred by the eleventh amendment.")).
As the Court finds Lillian's claims against FCSC are barred by the Eleventh Amendment, it does not reach FCSC's alternative arguments pertaining to immunity and the Government Tort Act. Even if the Rooker-Feldman doctrine does not deprive the Court of jurisdiction, Lillian's claims against FCSC must be dismissed with prejudice as barred by the Eleventh Amendment.
Beyond arguing Rooker-Feldman deprives the Court of jurisdiction over Lillian's complaint, UBS and BNY contend Lillian's claims against them are subject to dismissal under the doctrines of res judicata, collateral estoppel, law of the case, and the Anti-Injunction Act, 28 U.S.C. § 2283. UBS and BNY also contend Lillian's claims must be dismissed as vague, unsupported, and unintelligible.
Lillian alleges UBS colluded with Marleen Merchant's counsel, Weintraub Tobin, to release Lillian's UBS account statements pursuant to Marleen's subpoena before FCSC had a chance to rule on Merchant's petition to enforce the subpoenas. (Cmplt., 27:15-18.) She also claims UBS released statements to the Public Guardian in August 2015 that were not the statements requested and those statements were furnished without prior notice or authorization from Lillian. Lillian asserts UBS knew that she was the settlor of the 1999 Trust, that no Family Trust was ever created, and that she intended to sell the San Francisco real property in 2008. She claims that UBS agreed "to conform to the demands of Weintraub Tobin and Fresno County," knowingly and intentionally aiding and abetting the conversion and theft of her UBS assets. (Doc. 1, Cmplt., p. 27-30.) She contends UBS breached her right to privacy in her accounts and froze her account in September 2015 before any court order or ruling was issued; breached its contract by harassing her for unnecessary private information; made a "wrongful death ransom" against Beverly's life; and demanded she remove all her accounts from UBS within a week or face further liquidation.
UBS contends Lillian's claims are barred by the doctrine of issue preclusion. As the Court understands Lillian's allegations, her claims of fraud, unspecified privacy violations, breach of contract, and "wrongful death ransom" spring directly from UBS' compliance with FCSC's orders directing UBS to comply with Marlene Merchant's — subpoena requests; to freeze Lillian's UBS accounts pursuant to the October 20, 2015, order; to allow the Fresno County Public Guardian access and discretion to direct UBS on what assets in Lillian's account to liquidate; and to pay $1,528,271.44 to the Public Guardian. Lillian's claims are premised on the notion that FCSC had no jurisdiction to issue any orders regarding the trust assets, and that UBS acted in a spurious and unlawful manner in carrying out FCSC's orders.
Issue preclusion can be invoked by one not a party to the first proceeding, such as UBS, against a party who had a "full and fair opportunity to litigate the issue in the first case but lost," such as Lillian. DKN Holdings LLC v. Faerber, 61 Cal.4th 813, 820 (2015). The underlying objective is to preclude a party from re-litigating an issue that has been finally decided against that party in a prior suit. Id.
Issue preclusion prohibits the re-litigation of issues argued and decided in a previous case, even if the second suit raises different causes of action. Issue preclusion will apply "(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party to the first suit or one in privity with that party." Id. at 819.
Here, Lillian had a full and fair opportunity to litigate in the underlying proceeding whether the Family Trust existed and should have been funded at the time of Angelo's death in 2008, the amount the Family Trust should have been funded, and whether Lillian was fit to act as trustee of the Family Trust. Those identical issues were finally decided against Lillian by FCSC in the underlying case, which was affirmed by the Fifth DCA, and Lillian's petition for review before the California Supreme Court was denied.
Lillian's allegations of privacy violations and contract breach appear to stem from UBS providing account statements to the Public Guardian. Lillian, however, was removed as Trustee of the Family Trust as of May 2015, and the Public Guardian was appointed by FCSC as successor trustee. There is no allegation by Lillian how, in its role as trustee, the Public Guardian was not entitled to account information pertaining to funding of the Family Trust. This allegation suggests that the Public Guardian was not entitled to account information, which in essence seeks to re-litigate the appointment of a successor trustee.
Lillian's allegations that UBS wrongfully paid the Public Guardian out of her UBS accounts do not and cannot form the basis of a cognizable claim. The issue of whether assets from the UBS account were to be paid to the Family Trust was decided by FCSC in the underlying litigation. UBS' actions in complying with FCSC's judgment and its orders enforcing its judgment cannot form the basis of a legitimate cause of action because it necessarily seeks to re-litigate whether Lillian was required to fund the Family Trust.
Lillian also alleges UBS froze her accounts before FCSC issued any order requiring it to do so, which resulted in an IRS payment being rejected by UBS. However, Lillian concedes the IRS check was resubmitted for payment and penalties were paid by UBS. (Cmplt., p. 29:24-28.) As a result, Lillian has alleged there were no damages stemming from this "freeze" of her UBS account. To the extent there is any alleged wrongdoing by UBS in rejecting the IRS check or freezing the account at some point prior to the FCSC's October 20, 2015, order, there were no damages suffered, and the claim is not viable.
Lillian's allegations pertaining to UBS' "wrongful death ransom" are difficult to understand. Lillian alleges that
(Doc. 1, Cmplt., 30:5-8.) The document filed by UBS in January 2016 on the FCSC docket, which is judicially noticed,
(Doc. 97, ¶¶ 7-8.) This document does not state that Lillian could keep her funds if "Beverly Pellegrini's life were abruptly ended." Although there is no specific document referenced by Lillian in her complaint with regard to this "Wrongful Death Ransom" allegation, this is the only document filed by UBS with FCSC at that time. Lillian's allegation that UBS filed a "wrongful death ransom" is contradicted by the FCSC docket, and the Court need not assume the truth of this fact. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (court need not accept as true allegations that contradict facts which may be judicially noticed).
Typically, leave to amend a complaint should be granted, unless it is clear that Lillian's claims against UBS cannot be saved by amendment and any attempt to do so would be futile. Chang, 80 F.3d at 1296. The fraud and privacy allegations against UBS, aside from being overly vague and conclusory, are predicated on issues that were fully litigated by FCSC in the underlying case and decided against Lillian. Lillian cannot re-litigate those issues in this Court, even though framed inside a different claim. The wrongful death ransom allegation is contradicted by the text of UBS' state court filing in January 2016, and there are no damages alleged. None of Lillian's purported claims against UBS can be cured by amendment.
Lillian's only allegation against BNY pertains to the withdrawal of funds from Lillian's trust account in the amount of $1,528,271.44:
(Cmplt., 38:10-23.) This claim stems from an allegation that Lillian's UBS account funds were improperly withdrawn. This issue, however, was already decided by FCSC; UBS was complying with an order executing FCSC's judgment as to the trust assets. As discussed above, Lillian cannot re-litigate any issue pertaining to the existence of the Family Trust, the amount FCSC ordered it be funded, or FCSC's order that UBS make payment to Public Guardian. The claim against BNY is barred by issue preclusion. The predicate facts and issues of law on which this claim rests — the existence and funding of the Family Trust — were already decided against Lillian. This claim cannot be saved by amendment, and it is dismissed without leave to amend.
Fresno County
Lillian asserts Fresno County perpetrated a fraud that a Family Trust had been created under the 1999 Trust document and cites 18 U.S.C. §§ 1621-1623. Lillian claims the statements made by Fresno County, through the County Counsel, in its ex parte petition filed with the FCSC on October 19, 2016, were false. (Cmplt., 39:21-40:18.) Lillian also maintains Fresno County acquired funds from her UBS account by way of fraud and deliberate misrepresentation of the facts and the law. (Cmplt., 41:21-27.) These allegations stem from Lillian's primary contention that the Family Trust never existed:
(Cmplt., 41:15-20.) The issue of whether the Family Trust existed and whether it should have been funded with Lillian's trust assets was decided by FCSC. Any conversion claim against Fresno County predicated on Lillian's allegation that funds were wrongfully withdrawn from her account pursuant to court order is barred by issue preclusion. Additionally, the statutes Lillian cites in reference to a "conversion" claim, including 18 U.S.C. §§ 1621 (perjury), 1622 (subornation of perjury), 1623 (false declarations before grand jury or court), are criminal statutes for which there is no private right of action.
Lillian also alleges Fresno County Counsel, as representative for the Public Guardian, took Lillian's UBS assets by falsifying documents and court rulings in preparing ex part petitions and orders. These allegations, too, hinge on the premise that "Fresno County Counsel knew that no Family Trust had been created." (Doc. 1, Cmplt., 40:4.) As discussed above, Lillian cannot re-litigate the issue of whether a Family Trust was created — that issue was expressly decided by the FCSC. Her claim of fraud, conversion, and due process violations cannot rest on allegations regarding issue that were already decided against Lillian in the underlying matter.
Moreover, in their role as advocates for the Public Guardian and as the Public Guardian in the probate proceedings, Fresno County Counsel and Joshua Cochron are entitled to prosecutorial immunity. The California Government Code section 821.6 provides that "[a] public employee is not liable for injury caused by his instituting or prosecuting any judicial or administrative proceeding within the scope of his employment, even if he acts maliciously and without probable cause." "California courts construe this provision broadly 'in furtherance of its purpose to protect public employees in the performance of their prosecutorial duties from the threat of harassment through civil suits.'' Ciampi v. City of Palo Alto, 790 F.Supp.2d 1077, 1108-09 (N.D. Cal. 2011) (quoting Gillan v. City of San Marino, 147 Cal.App.4th 1033, 1048 (2007)). "Immunity under Government Code section 821.6 is not limited to claims for malicious prosecution, but also extends to other causes of action arising from conduct protected under the statute, including defamation and intentional infliction of emotional distress." Gillan, 147 Cal. App. 4th at 1048. It also applies to all employees of a public entity, not just its legally trained personnel. Asgari v. City of L.A., 15 Cal.4th 744, 756-57 (1997).
For example, in Pagtakhan v. Alexander, 999 F.Supp.2d 1151, 1160 (N.D. Cal. 2013), the district court applied section 821.6 to claims against employees of the Public Guardian's office based on the prosecution of a conservatorship proceeding. Here, like Pagtakhan, the Public Guardian, as successor trustee, was obligated to pursue FCSC's order that Lillian fund the Family Trust. Lillian's allegations regarding the County Counsel's preparation of ex parte petitions and orders and obtaining injunctions related to this funding of the Family Trust all stem from the County Counsel's representation of the County and the Public Guardian in the underlying case, and the County Counsel and the Public Guardian are immune from suit under section 821.6
Finally, to the extent Lillian claims County Counsel or the Public Guardian made misrepresentations to the FCSC during the course of the underlying proceedings, they are part of Fresno County, a public entity, and are immune for any injury caused by misrepresentation. Cal. Gov't Code § 818.8.
In sum, the Court finds Lillian's allegations against Fresno County based on assertions the Family Trust never existed or that Fresno County had no legitimate power to withdraw funds from Lillian's UBS account, are barred by the doctrine of issue preclusion. Moreover, as it pertains to actions Fresno County and the Public Guardian took in carrying out FCSC's orders, Fresno County — and its employees — is entitled to immunity. Fresno County's motion to dismiss is GRANTED.
In its motion to dismiss, Weintraub Tobin argues Lillian's allegations of fraud against it are insufficient to state a cognizable claim as a matter of law. (Doc. 45.) Beyond this, Weintraub Tobin asserts the allegedly fraudulent conduct is outside the applicable statute of limitations.
Lillian asserts Weintraub Tobin, as counsel for Marleen Merchant, knowingly and falsely claimed to FCSC that a Family Trust was created and that Lillian had breached her fiduciary duties by failing to fund the Family Trust. (Cmplt., 18:26-29:2.) Lillian also contends Weintraub committed fraud by claiming that all property held in the 1999 Trust was community property, which Weintraub Tobin knew to be false. (Cmplt., 18:2-5.) Lillian asserts this became clear when Weintraub Tobin filed a document in June 2016 with the Fifth DCA stating that the Family Trust was "supposed" to have been created, implying that it never actually had been created. (Cmplt., 18:6-8.) Lillian terms this "fraud on the court."
Weintraub Tobin argues there is no private cause of action for "fraud on the court," and any such claim is barred by res judicata because the only remedy for such a claim is to set aside the FCSC's findings in the underlying case.
A claim for "fraud on the court" arose from the common law as a court-created equitable device to remedy injustices under the court's inherent power. Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 248 (1944). Federal Rule of Civil Procedure 60 expressly provides a remedy for such fraud, stating that "the court may relieve a party or its legal representative from a final judgment, order, or proceeding . . . [for] fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing part . . . . " Fed. R. Civ. P. 60(b)(3). Rule 60 does "not limit a court's power to. . . set aside a judgment for fraud on the court." Fed. R. Civ. P. 60(d)(3). Due to its equitable origins, however, no court has ever recognized fraud on the court as an independent legal cause of action for which a plaintiff may recover damages. It is, instead, a theory pursuant to which a party may seek relief from a judgment or court order induced on the basis of the opposing party's fraud. Hazel-Atlas Glass Co., 322 U.S. at 248.)
To the extent Lillian's "fraud on the court" claim seeks damages, it is not viable because the only available remedy is equitable. To the extent Lillian's claim of fraud on the court seeks to set aside the FCSC judgment, the claim is barred by res judicata. Federal courts "will not entertain a collateral attack on a state judgment on the basis of 'fraud on the court' in an action for damages." LaMie v. Wright, No. 1:12-cv-1299, 2014 WL 1686145, at *14 (W.D. Mich. Apr. 29, 2014); see also Fox Hollow of Turlock Owner's Ass'n v. Mauctrst, LLC., No. 1:03-cv-5439-AWI-SAB, 2015 WL 5022762, at * 4 (E.D. Cal. Aug. 24, 2015). "The universal rule in the federal courts . . . is that an equitable action to set aside a judgment may only be heard by the court whose judgment is challenged." (citing Weisman v. Charles E. Smith Mgmt., Inc., 829 F.2d 511, 514 (4th Cir.1987); Sessley v. Wells Fargo Bank, N.A., No. 2:11-cv-348, 2012 WL 726749, at * 9 (S.D. Ohio Mar. 6, 2012) (if plaintiff believed that a state court foreclosure judgment was obtained by fraud on the state court, plaintiff's remedy was by way of motion for relief filed in the state court, not by way of a collateral attack in federal court)). If she believes the FCSC judgment was procured by fraud on the court, Lillian's remedy is (or was) to bring a post-judgment motion or an independent action in equity to vacate the judgment in that court. A collateral attack on that state court judgment cannot be made in federal court.
For this reason, Lillian's allegation of fraud against Weintraub Tobin is not viable as a claim for relief and cannot be cured by amendment. As such, leave to amend is inappropriate.
Comerica contends Lillian makes no allegation that gives rise to a cognizable claim against it, and Comerica owes no duty of care to Lillian as an unrelated third party. Comerica requests the claim against it be dismissed without leave to amend. (Doc. 46-1.)
Lillian alleges that UBS withdrew funds from her trust account in the amount of $1,528,271.44 on BNY account number 043301601. BNY CEO Gerald Hassell and General Counsel Anthony Mancuso were "contacted immediately and informed of the fraudulent transfer and to stop payment and return the check to UBS Financial Services. Bank of NY Mellon did not comply." (Cmplt., 38:10-23.) Lillian's daughter, Beverly, was informed by the CPA and Controller for Fresno County that the Public Guardian uses Comerica Inc. to deposit funds that the Public Guardian receives. (Cmplt., 38:24-26.) Lillian claims Comerica was contacted immediately to return the check unpaid to UBS "on receipt and before it cleared." (Cmplt., 39:2-12.) Lillian does not state whether she was able to confirm that Comerica was the depository bank.
No formal cause of action is stated, and the allegation that Comerica was asked to stop payment, but did not return the funds to UBS does not form the basis of a claim upon which relief can be granted. Even to the extent Comerica received a deposit from UBS made payable to the Public Guardian, Comerica would have been acting in accord with FCSC's order that funds from Lillian's UBS account be withdrawn and paid to the Public Guardian. Lillian has not alleged any facts showing how Comerica has any duty to her. The allegations against Comerica merely show that Comerica may have been the depository bank for the trust funds ordered to be paid to the Public Guardian. There is no cognizable claim stated against Comerica and any amendment will be futile. As such, Lillian's claim against Comerica is dismissed with prejudice.
For the reasons stated above, IT IS HEREBY ORDERED that:
IT IS SO ORDERED.
Lillian's bare allegation against Comerica is that it may have been the depository bank for the Public Guardian and it would not respond to Lillian's request to stop payment and return her UBS funds. (Cmplt., pp. 38-39.) Construing this assertion as some type of claim, it is still inextricably intertwined with FCSC's order requiring payment be made to the Public Guardian and cannot be considered without examining FCSC's underlying legal determinations.
