Wood v. SGT Investments

Background

Andrea Wood, who was representing herself, filed an amended complaint arising from the foreclosure sale of her home and her subsequent eviction. She alleged that Tom Malgesini was involved in loans secured by the property, that a $100,000 payment was not applied as she expected, and that the property was later sold through foreclosure. SGT Investments, LLC, and another entity acquired title through a trustee’s deed upon sale.

SGT Investments later brought an unlawful-detainer action in state court. A default judgment was entered, a writ of possession was issued to the Contra Costa County Sheriff’s Office, and the Sheriff’s Office evicted the occupants on June 10, 2021. Wood then filed state and federal lawsuits. In this federal case, she asserted claims including fraud, lack of due process, illegal eviction, and an alleged unlawful sale by fraud. She sought to nullify the sale and recover $10 million in damages.

Jurisdiction and motions

Malgesini and the Contra Costa County Sheriff’s Office separately moved to dismiss. The court concluded that Wood had not established diversity jurisdiction because the amended complaint did not allege a basis for it, and her later filing asserted that she and the defendants were California citizens. But the court held that the alleged Fourteenth Amendment due-process violation was a non-frivolous federal claim, which was enough to establish federal-question jurisdiction at that stage.

Fourteenth Amendment claim

The court dismissed the Fourteenth Amendment claim under Federal Rule of Civil Procedure 12(b)(6), which requires dismissal when a complaint does not state a legally sufficient claim for relief. Wood pleaded that SGT Investments violated the Fourteenth Amendment and described SGT Investments as a private real estate group. The court explained that the Fourteenth Amendment generally restricts government action, not private conduct. Wood did not allege that SGT Investments was a government actor or that there was a sufficiently close connection between the government and the challenged conduct.

The court stated that this was the only claim over which it had original federal jurisdiction. After dismissing it, the court declined to exercise supplemental jurisdiction—that is, authority to decide related state-law claims—over Wood’s remaining state-law claims.

Disposition

The court granted the defendants’ motions to dismiss and dismissed the case with leave to amend. Because Wood was proceeding without a lawyer, the court gave her an opportunity to file an amended complaint addressing the identified deficiencies within 20 days after the order’s issuance.

The opinion text provided here begins discussing Wood’s separate motion for repossession of the property and additional claims, but that discussion is incomplete. Its disposition is therefore unclear from the provided text.