Poorsina v. Bank of America, N. A.

Background

Ali Poorsina, proceeding without a lawyer and having been allowed to proceed without paying filing fees, sued Bank of America, N.A.; Guaranteed Rate, Inc.; and Xiaosong Zhang and Meng Li, identified as co-trustees of the Li Zhang Family Trust. Poorsina alleged that he formerly owned a San Francisco property, obtained a $890,000 mortgage loan in 2005, and later lost the property through a public auction. He alleged that later property transfers and mortgage transactions involved fraudulent materials and advertisements.

The complaint asserted a claim under the False Claims Act, a federal law addressing certain fraudulent claims for payment or property made to the federal government. Poorsina sought damages and civil penalties, cancellation of two security instruments, and relief to establish title to the property.

Mandatory screening

Because Poorsina had been allowed to proceed without paying filing fees, the court was required to screen the complaint under 28 U.S.C. § 1915(e)(2)(B). That screening required dismissal if the complaint was frivolous, failed to state a claim on which relief could be granted, or sought monetary relief from an immune defendant.

Jurisdiction and standing

The court found no adequate basis for federal-question jurisdiction. The complaint did not allege that any defendant knowingly presented a false or fraudulent claim for payment to a federal government officer, employee, or agent, or made a materially false record connected to such a claim. Instead, the allegations concerned real-estate listings, property transfers, and private mortgage transactions. The court stated that the government was not alleged to be a party to those transactions and that Poorsina claimed personal harm rather than harm to the government.

The court also found that Poorsina was not authorized to prosecute the False Claims Act claim as pleaded. A private action under that law may proceed on behalf of the government only in the circumstances permitted by the statute, and Poorsina’s complaint did not assert an action in the government’s name.

The court separately found standing problems. It stated that Poorsina was not the real party in interest for a False Claims Act action as pleaded. It also found that he did not allege he was or had been a party to the disputed mortgage loans, even though he sought to challenge or cancel instruments connected to those loans. The court further stated that the complaint did not identify a legal basis or duty supporting the requested cancellation and quiet-title relief.

The court rejected diversity jurisdiction as to Zhang and Li because the complaint identified both them and Poorsina as California citizens. It also stated that, because the federal claim did not support subject-matter jurisdiction, there was no basis to exercise supplemental jurisdiction over a possible state-law quiet-title claim.

Failure to state a claim

The court held that the False Claims Act allegations did not satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity. The complaint did not identify a federal government officer, employee, or agent involved in the transactions, did not identify a false claim made to the government, and did not adequately allege that Zhang or Li submitted a claim for money or property to the government. The court also stated that Fannie Mae and Freddie Mac are private companies and therefore are not federal government officers, employees, or agents for purposes of the allegations at issue.

The court construed the requested quiet-title relief as a possible California state-law claim. It found that the complaint did not adequately explain how title was disputed or why Poorsina was entitled to quiet title. The court noted that the complaint alleged Poorsina had divested his ownership interest through the 2017 public-auction sale. It also stated that a deed of trust does not constitute the type of adverse ownership interest needed for a quiet-title claim under the law discussed in the opinion.

Rulings

The court dismissed Poorsina’s complaint without prejudice under the mandatory screening requirements of 28 U.S.C. § 1915(e)(2)(B). The court granted Poorsina 30 days from the order’s date to file an amended complaint and stated that failure to do so could result in dismissal of the case with prejudice.

The court denied without prejudice all defendants’ motions to dismiss as premature. It also denied without prejudice all requests for judicial notice as premature. The court explained that screening had to occur before service and before the case could proceed to later stages. The opinion text provided does not identify the magistrate judge by name.