Fresno Rock Taco, LLC, et al. v. Rodriguez, et al.

Filing 17

MEMORANDUM, DECISION regarding Defendant Rhames' and defendant City of Fresno's Motion to Dismiss 10 and defendant Rodriguez's Motion to Dismiss 11 Plaintff's Frist Amended Complaint 9 , signed by Judge Oliver W. Wanger on 8/9/2011. (Kusamura, W)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

FRESNO ROCK TACO LLC, a California
Limited Liability corporation;
ZONE SPORTS CENTER, LLC, a
California Limited Liability
corporation; THE FINE IRISHMAN,
LLC, a California Limited
Liability corporation; MILTON
BARBIS, an individual; HEIDI
BARBIS, an individual; HEIDI
BARBIS, as guardian at litem for
CLAIRE BARBIS, a minor,

1:11-cv-00622 OWW SKO
MEMORANDUM DECISION REGARDING
DEFENDANT RHAMES‟ AND
DEFENDANT CITY OF FRESNO‟S
MOTION TO DISMISS (DOC. 10)
AND DEFENDANT RODRIGUEZ‟S
MOTION TO DISMISS (DOC. 11)
PLAINTIFF‟S FIRST AMENDED
COMPLAINT (DOC. 9)

Plaintiffs,
v.

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BEN RODRIGUEZ, an individual;
BRENDAN RHAMES, an individual;
GEORGEANE WHITE, an individual;
THE CITY OF FRESNO, a California
municipality; and DOES 1-100,
inclusive,

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Defendants.

I. INTRODUCTION.
Plaintiffs Fresno Rock Taco LLC; Zone Sports Center, LLC;

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The Fine Irishman LLC; Milton Barbis, Heidi Barbis, and Heidi
Barbis as guardian at litem for Claire Barbis (“Plaintiffs”) are
proceeding with this civil rights action pursuant to 42 U.S.C. §
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1983.

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18, 2011.

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Plaintiffs filed a first amended complaint (“FAC”) on May
(Doc. 9)

Defendants Brendan Rhames and the City of Fresno filed a
motion to dismiss the FAC on June 1, 2011.

(Doc. 10).

Defendant

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Ben Rodriguez filed a separate motion to dismiss the FAC on June
30, 2011 (Doc. 11).

Plaintiffs filed oppositions to both

Defendants‟ motions on July 18, 2011.

(Doc. 12).

II. BACKGROUND
Plaintiffs‟ FAC contains allegations regarding three

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defendants: State of California, Department of Insurance employee

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Paul Rodriguez (“Rodriguez”); Fresno Police Department Detective

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Brendan Rhames (“Rhames”), and the City of Fresno (“Fresno”)

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relating to searches conducted on May 28, 2009.

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All Plaintiffs allege, pursuant to 42 U.S.C. § 1983, an

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unreasonable search and seizure in violation of their Fourth

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Amendment rights against both Rodriguez and Rhames.

(FAC at 9).

Plaintiffs Milton, Heidi, and Claire Barbis also assert a
violation of Plaintiffs‟ Fourteenth Amendment rights to due

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process against Defendants Rodriguez and Rhames.

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Finally, all Plaintiffs assert a Monell Claim for improper

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policies and practices against Defendant Fresno.

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(FAC at 11).

(FAC at 12).

All Plaintiffs assert a Franks violation by Defendants
Rodriguez and Rhames relating to the affidavit submitted in
support of the search warrants executed on Plaintiffs‟ businesses
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and home.

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false information in support of the search warrant, and that

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Rhames provided false information and misrepresentations to the

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(FAC at 9).

Plaintiffs claim that Rodriguez gave

Affiant to use in the Statement of Probable Cause.

(FAC at 9).

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In support of this claim, Plaintiffs point to denials, under
penalty of perjury, by Mr. Alex Costa (“Costa”) and Mr. Roger

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Brown (“Brown”) that they ever told Defendants many of the

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statements contained in the Statement of Probable Cause.

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5-6).

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Rhames also seized items outside the scope of the search warrant

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(FAC at

Plaintiffs further contend that Defendants Rodriguez and

and returned the items seized to Kirk Vartanian (“Vartanian”),
who had no right to the items.

(FAC 4-5).

Plaintiffs Milton, Heidi, and Claire Barbis also claim a

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violation of their Fourteenth Amendment right to due process.

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(FAC at 11).

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their home they were threatened by Defendants (including a

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statement by one Defendant referring to his flashlight as his

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“Kill Stick”), confined for many hours, and were not free to

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leave.

These Plaintiffs allege that during the search of

(FAC at 4-5).

These Plaintiffs also claim that because

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of the disputed warrants, the search and seizures deprived them
of their liberty and property without due process.

(FAC at 11).

Finally, Plaintiffs allege a Monell Claim against the City

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of Fresno.

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properly train Defendant Rhames in procedures for investigating

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(FAC at 12).

Plaintiffs claim that Fresno failed to

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insurance fraud crimes.

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that City of Fresno had a policy and procedure of not supervising

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officers who were assigned to insurance fraud crimes and had no

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(FAC at 13)

Plaintiffs also contend

procedure in place to check the validity of crime reports from

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such officers or to instruct officers as to the care and
protection of children during a search and seizure of their home.
(FAC at 13).

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III. STANDARD OF DECISION

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A motion to dismiss brought under Federal Rule of Civil

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Procedure 12(b)(6) “tests the legal sufficiency of a claim.”

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Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).

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In deciding

whether to grant a motion to dismiss, the court “accept[s] all
factual allegations of the complaint as true and draw[s] all
reasonable inferences” in the light most favorable to the

Rodriguez v. Panayiotou, 314 F.3d 979, 983 (9th

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nonmoving party.

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Cir.2002).

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“contain sufficient factual matters, accepted as true, to „state

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a claim to relief that is plausible on its face.‟”

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Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v.

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To survive a motion to dismiss, a complaint must

Ashcroft v.

Twombly, 550 U.S. 544, 570 (2007)).

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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. The plausibility standard is not akin to a
„probability requirement,‟ but it asks for more than a sheer
possibility that defendant has acted unlawfully. Where a
complaint pleads facts that are „merely consistent with‟ a
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defendant‟s liability, it „stops short of the line between
possibility and plausibility of entitlement to relief.‟

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Id. (citing Twombly, 550 U.S. 556-57).

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Nevertheless, the court “need not assume the truth of legal

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conclusions cast in the form of factual allegations.”

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States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

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Cir. 1986).

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While the standard does not require detailed factual

allegations, “it demands more than an unadorned, the defendantunlawfully-harmed-me accusation.”

Iqbal, 129 S. Ct. at 1949.

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pleading is insufficient if it offers mere “labels and

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conclusions” or “a formulaic recitation of the elements of a

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cause of action.”

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1950 (“Threadbare recitals of the elements of a cause of action,

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supported by mere conclusory statements, do not suffice.”).

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Twombly, 550 U.S. at 555; Iqbal, 129 S. Ct. at

In ruling upon a motion to dismiss, the court may consider
only the complaint, any exhibits thereto, and matters which may

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be judicially noticed pursuant to Federal Rule of Evidence 201.

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See Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir.

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1988).

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IV. DISCUSSION
A.

Standing
All Defendants have made a 12(b)(6) motion to dismiss

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claiming that Plaintiffs Fresno Rock Taco, LLC; Zone Sports

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Center, LLC; The Fine Irishman, LLC; Milton Barbis; and Heidi

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Barbis have no standing to bring this suit.
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(Doc. 10 at 4; Doc.

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11-1 at 9).

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included Plaintiff Claire Barbis in their motion on this ground,

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but did not pursue this claim.

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Defendants Rhames and City of Fresno also initially

Defendants contend that

Plaintiffs‟, excluding Claire Barbis, filing for Chapter 7

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bankruptcy resulted in their causes of action becoming the
property of their bankruptcy estate.

Defendants argue only the

bankruptcy Trustee has standing to bring this suit.
Plaintiffs counter that the bankruptcy Trustee has examined

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these claims and has determined, for bankruptcy estate purposes,

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they have no value and has abandoned them, resulting in the

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claims re-vesting to the Plaintiffs.

Plaintiffs also argue that

they were not aware of their potential claims until after they
filed bankruptcy petitions.

Additionally, Plaintiffs claim that

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even if this were not the case, Claire Barbis would still have

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standing to bring her claims as she never filed for bankruptcy.

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Finally, Plaintiffs contest that although Milton and Claire

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Barbis stated that they were referred to as the Plaintiff LLCs in

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their bankruptcy petition, the Plaintiff LLCs never declared

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bankruptcy and still have standing to bring their claims.

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“An „estate‟ is created when a bankruptcy petition is
filed.”

Cusano v. Klein, 264 F.3d 936 (9th Cir. 2001); 11 U.S.C.

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§ 541(a).

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of action that accrue before the claimant declares bankruptcy.

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Sierra Switchboard co. v. Westinghouse Electric Corp., 789 F.2d

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The property of the bankruptcy estate includes causes

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705, 707-709 (9th Cir. 1986).

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at the time that, “the plaintiff knows or has reason to know of

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the injury which is the basis of the action.”

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A § 1983 cause of action accrues

Harris, 370 F.3d 945, 954 (9th Cir. 2004).

Maldonado v.

A Chapter 7 debtor

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may only bring a cause of action if the debtor can show either 1)
the action was not subject to the bankruptcy or 2) was abandoned

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by the bankruptcy trustee.

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bankruptcy estate and only the Trustee has standing to litigate

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the cause of action.

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Supp. 1447, 1453 (9th Cir. 1996).

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Otherwise the claim belongs to the

Rowland v. Novus Financial Corp., 949 F.

A debtor must disclose any litigation likely to arise to the
bankruptcy Trustee so that it may become a part of the bankruptcy
estate.

Failure to do so, or asserting a lack of any claim, may

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result in the debtor being judicially estopped from litigating

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the claim in a non-bankruptcy forum.

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Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992).

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However, the Ninth Circuit only recognizes judicial estoppel when

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the Bankruptcy Court relied on the assertion that the debtor did

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Hay v. First Interstate

not intend to bring any litigation, and the litigation would

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result in a windfall to the debtor against her creditors.

Donato

v. Metropolitan Life Insurance Co., 230 B.R. 418, 421 (N.D. Cal.

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1999) (citing Milgard Tempering, Inc. v. Selas Corp. of America,

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902 F.2d 703, 715 (9th Cir. 1990)).

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In Cusano v. Klein, 264 F.3d 936, 945 (9th Cir. 2001) the
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plaintiff sought to bring an action for unpaid royalties.

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However, the plaintiff had previously filed for bankruptcy and

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had not informed the Court in the bankruptcy proceedings of this

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cause of action, which had accrued prior to filing his petition

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for bankruptcy.

Id. at 948.

By the time of his suit for unpaid

royalties, plaintiff‟s bankruptcy proceedings had been closed

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without the cause of action having been examined or administered

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for the benefit of any of the plaintiff‟s debts.

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this would result in the unadministered asset (the claim) being

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technically abandoned and reverting back to the plaintiff-debtor.

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Id. at 945.

Id.

Normally

However, because the bankruptcy estate did not have

the opportunity to examine the claim, the asset (claim) continues
to belong to the bankruptcy estate and does not revert to the

Id. at 946.

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plaintiff-debtor.

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The plaintiff had no standing to

bring that particular claim.

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Defendants contend that the actions alleged in the FAC

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should have put Plaintiffs on notice of their claims well before

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their bankruptcy petition, and that those claims accrued before

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the filing of the bankruptcy petition, as in Cusano.

Also like

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Cusano¸ the Plaintiffs bankruptcy estate closed prior to the
filing of their complaint.

Defendants argue that, like the

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plaintiff‟s claim in Cusano, the Plaintiffs‟ cause of action here

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was not technically abandoned and did not revert back to them,

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but, rather, still belongs to the bankruptcy estate, making the

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Trustee the only person with standing to bring any claims.
Furthermore, because Plaintiffs never listed their potential
claims on their bankruptcy petition nor informed the Trustee of
the potential litigation, Defendant City of Fresno contends that

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Plaintiffs should be judicially estopped from bringing their
claims outside of a bankruptcy forum.

See Hay 978 F.2d 555, 557

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(holding that a debtor‟s failure to inform the bankruptcy estate

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of potential causes of actions precluded him from bringing those

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claims against a former creditor outside of a bankruptcy

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proceeding).

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Plaintiffs oppose the Defendants‟ position.

Plaintiffs

contend that the bankruptcy estate does not own their action.

To

prove this, Plaintiffs must show that the cause of action is

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either exempt from the bankruptcy proceedings, or was abandoned

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by the Trustee.

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not contend that the cause of action was exempt, but rather, they

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claim that it was abandoned by the Trustee.

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the “United State Trustee‟s Ex Parte Motion to Reopen Case” (Doc.

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Rowland 949 F. Supp. 1447, 1453.

Plaintiffs do

Plaintiffs point to

12-2), dated October 20, 2010, which asks the Bankruptcy Judge to

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reopen the Plaintiffs‟ bankruptcy case after having learned of
this lawsuit and another pending in the Northern District of

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California.

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Richard Lee on October 21, 2010 (Doc. 12-3).

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examining the claim, the U.S Trustee found, in his “Notice of

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The case was reopened by U.S. Bankruptcy Judge W.

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However, after

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Filing Report of No Distribution” (“Notice”), filed April 16,

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2011 (Doc. 12-4) that there were no funds to distribute and that

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the estate had been fully administered.

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The Notice also provided

an objection period for interested parties to request a hearing.

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No objection was filed and no hearing was held.

Plaintiffs argue

that this Notice abandoned the claims to the Plaintiffs.
11 U.S.C.A. § 554 governs the abandonment of estate
property.

Section 554 states:

A) After notice and a hearing, the trustee may abandon any
property of the estate that is burdensome to the estate or
that is of inconsequential value and benefit to the
estate.
B) On request of a party in interest and after notice and a
hearing, the court may order the trustee to abandon any
property of the estate that is burdensome to the estate or
that is of inconsequential value and benefit to the
estate.
C) Unless the court orders otherwise, any property scheduled
under section 521(a)(1) of this title not otherwise
administered at the time of the closing of a case is
abandoned to the debtor and administered for purposes of
section 350 of this title.
D) Unless the court orders otherwise, property of the estate
that is not abandoned under this section and that is not
administered in the case remains property of the estate.
11 U.S.C.A. § 554.
creditors.”

“There is no abandonment without notice to

Sierra Switchboard Co. v. Westinghouse Electric Co.,

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789 F.2d 705, 709.

It is uncontested that Section 554(c) above

does not apply since Plaintiffs did not list their cause of
action in the bankruptcy schedules.
Plaintiffs do cite a Notice which declares the claims to
have no value and to be of no interest to the bankruptcy estate.
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The Notice also provided a period during which objections could

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have been filed and a hearing could have been held.

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objections were filed.

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No such

This Notice, coupled with the lack of

objections, adequately served as notice and hearing, under

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Section 554(a), of the Trustee‟s abandonment of Plaintiff‟s
claims.

See In re Tucci, 47 B.R. 328, 331 (Bankr. E.D.Va. 1985)

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(holding that a hearing is only required if an objection to the

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proposed abandonment is filed), cited with approval in Sierra

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Switchboard Co. v. Westinghouse Electric Co., 789 F.2d 705, 709.

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Unlike Cusano, the Trustee here had the opportunity to

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examine the Plaintiffs‟ claims.

The Trustee then gave notice of

his decision to abandon the claims.
did revert back to them.

As such, Plaintiffs‟ claims

Plaintiffs have standing to bring this

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suit.

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Bankruptcy Court relied on the Trustee‟s decision to abandon the

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claims, not the Plaintiffs‟ initial assertion that there were no

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claims.

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Judicial estoppel is not here appropriate because the

There is no need to discuss Plaintiffs‟ other arguments that
they lacked awareness of the existence of their claims or that

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neither the LLC‟s nor Claire Barbis filed for bankruptcy.
Defendants‟ motions to dismiss all claims of all Plaintiffs

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are DENIED.
B.

Fourteenth Amendment Due Process Claim

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Defendant Rodriguez moves to dismiss Plaintiffs‟ Second
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Cause of Action, alleging a Fourteenth Amendment Due Process

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violation.

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Second Cause of Action sounds only in Fourth Amendment

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(Doc. 11-1 at 6).

Defendant argues that Plaintiffs‟

violations, and that, as such, the more specific Fourth Amendment

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standard should be applied instead of the more general
substantive due process guide of the Fourteenth Amendment.
Plaintiffs argue that their second cause of action alleges

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both Fourth and Fourteenth Amendment violations.

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further contend that the Fourteenth Amendment is the “only proper

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avenue for any claim of improper conduct as to a detainee.”

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Plaintiffs

As

Plaintiffs Milton, Heidi and Claire Barbis were held in their own
home, not free to leave, and not free to leave the kitchen for
long periods of time, Plaintiffs contend that they should be
considered in-custody detainees.
“Where a particular Amendment „provides an explicit textual

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source of constitutional protection‟ against a particular sort of

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government behavior, „that Amendment, not the more generalized

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notion of “substantive due process,” must be the guide for

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analyzing these claims.‟”

Albright v. Oliver, 510 U.S. 266, 273

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(1989) (quoting Graham v. Connor, 490 U.S. 386, 395 (1989)).
However, the Supreme Court has said, “In a due process challenge

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to executive action, the threshold question is whether the

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behavior of the governmental officer is so egregious, so

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outrageous, that it may fairly be said to shock the contemporary

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conscious.”

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County of Sacramento v. Lewis, 523 U.S. 833, 847,

n.8 (1998).

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Defendant is correct that Plaintiffs‟ allegations regarding
the reasonableness of the Defendants‟ search and seizure

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operation must be pled under the Fourth Amendment.

However,

Plaintiffs do just that in ¶66 of the FAC under their Second
Cause of Action.
Plaintiffs also allege that an officer threatened them and

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their three-year-old child with a large flash light, referring to

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it as his “Kill Stick”.

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to become hysterical.

A trier of fact could find such an act to

be so outrageous as to shock the conscious.

Plaintiffs‟ Second

Cause of Action is sufficiently pled under both the Fourth and
Fourteenth Amendments.
Defendant Rodriguez‟s motion to dismiss Plaintiff‟s Second

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This was alleged to have caused Claire

Cause of Action is DENIED.

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C.

Judicial Deception Pleading Standard
Defendant Rodriguez brings a 12(b)(6) motion to dismiss part

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of Plaintiffs‟ First Cause of Action, insofar as it alleges a

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Franks violation of their Fourth Amendment Rights based on

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judicial deception.

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contend that Defendant engaged in judicial deception, the claim

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Defendant argues that since Plaintiffs

sounds in fraud and is thus subject to the heightened pleading
standards of Rule 9(b).

A standard, Defendant argues,
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Plaintiffs‟ FAC does not meet.

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even if not subject to the heightened standard of Rule 9,

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Plaintiffs‟ FAC does not meet the Iqbal and Twombly standards for

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Further, Defendant claims that

Rule 8.
Plaintiffs counter that the 9th Circuit has not adopted a
heightened pleading standard for Constitutional tort claims and
that Plaintiffs‟ FAC satisfies Rule 8 under current law.
When bringing a claim of Judicial Deception resulting in the

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violation of Fourth Amendment rights, “A § 1983 plaintiff must

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show that [1] the investigator „made deliberately false

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statements or recklessly disregarded the truth in the affidavit‟
and [2] that the falsifications were „material‟ to the finding of
probable cause.”

Galbraith v. County of Santa Clara, 307 F.3d

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1119, 1126 (9th Cir. 2002) (citing Hervey v. Estes, 65 F.3d 784,

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790 (9th Cir. 1995)).

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applied to constitutional tort claims in which improper motive is

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an element.

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However, there is no heightened pleading

Id. at 1119.

In Galbraith, the Court held that Rule 9(b) does not apply
to constitutional tort claims in which improper motive is an

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element, instead focusing on the less stringent Rule 8 standard.

Id. at 1125.

There, the plaintiff claimed that the deficient

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performance and lies of a coroner led to his improper arrest.

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Id. at 1126-27.

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that the coroner “recklessly disregarded the truth by . . .

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In his amended complaint, the plaintiff claimed

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ignoring abundant evidence,” claimed to do work that he had not

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done, and lied in his autopsy report, to investigators, and on

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the witness stand to cover up his incompetence.

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Id. at 1127.

Finally, the plaintiff alleged in his amended complaint that

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these lies proximately caused his arrest and prosecution.

The

Court found that “The amended complaint adequately alleges a
Fourth Amendment violation.”

Id. at 1127.

Galbraith is a pre-Twombly and Iqbal pleading case.

The

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Rule 8 pleading landscape has since been altered.

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Galbraith, Plaintiffs allege that Rodriguez lied and deceived.

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As in

They offer sworn statements by Mr. Brown and Mr. Costa refuting
statements Defendant claimed they made and included in the
Statement of Probable Cause.

Bare allegations of lies and deceit

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met the first prong of deliberate or recklessly made false

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statements in the pre-Twombly pleading world.

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allegations include sworn witness statements by Mr. Costa and Mr.

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Brown identifying specific false statements made by the

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Defendant.

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Here, Plaintiff‟s

Such a pleading satisfies both Twombly and Galbraith.

Plaintiffs advance an alternative theory; that Mr. Costa and

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Mr. Brown lied to Defendant Rodriguez.

Plaintiffs assert that

Defendant‟s reliance on these statements was reckless.

Defendant

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argues that this assertion is a conclusion of law and does not

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plead sufficient facts, because both hearsay evidence and

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inferences are acceptable sources of information for police to

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rely on when determining probable cause.

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See Hart v. Parks, 450

F.3d 1059, 1066 (9th Cir. 2006).

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However, Plaintiffs allege in the FAC that Defendant had no
knowledge of the truthfulness of the statements he was making in

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reckless disregard of the truth.

Taking this factual pleading as

true, a trier of fact could find Defendant‟s lack of good-faith

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belief to be a reckless disregard for the truth.

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allege that the Defendant falsely stated that Mr. Costa had

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twenty years of experience in the restaurant industry in the

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Statement of Probable Cause.

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Plaintiffs

However, the FAC also states that

Mr. Costa is only twenty-eight years old.

Taking this assertion

as true also strongly supports the inference that Defendant
recklessly disregarded the truth.
The plaintiff in Galbraith pled that the alleged false

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statements proximately caused his arrest.

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not specifically alleged here, many of the FAC‟s alleged facts

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give rise to the inference that Defendant‟s intentionally false

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statements or reckless disregard for the truth were material in

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Though causation is

causing the search warrant to issue and led to the detention

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during and alleged wrongful seizure of property under the search
warrant.

For example, Plaintiffs allege that The Statement of

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Probable Cause lacks a credible factual basis.

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Plaintiffs‟ factual allegations as true sufficiently pleads that

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the false statements were material to the determination of

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Taking all

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probable cause.
Defendants‟ motion to dismiss the First Cause of Action is
DENIED.

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V. CONCLUSION

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For the reasons set forth above, Defendants‟ motions to

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dismiss Plaintiffs‟ Causes of Actions are DENIED.

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Plaintiffs shall submit a proposed order consistent
with this decision within five (5) days of electronic service of
this decision.

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DATED:

August 9, 2011.

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/s/ Oliver W. Wanger
Oliver W. Wanger
United States District Judge

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