Irigoyen v. First Guarantee Financial Corporation et al

Filing 22

ORDER signed by Chief Judge Anthony W. Ishii on 10/12/2011 acknowledging 21 Notice of Bankruptcy and ordering additional briefing. Plaintiff's reply due by 10/17/2011; Defendants sur-reply due by 10/19/2011. The hearing set for 10/24/2011 at 01:30 PM in Courtroom 2 (AWI) before Chief Judge Anthony W. Ishii shall remain on calendar. (Lundstrom, T)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT FOR THE 6 EASTERN DISTRICT OF CALIFORNIA 7 8 9 10 11 12 13 BERNADETTE IRIGOYEN, personally ) and on behalf of all similarly situated, ) ) Plaintiff, ) v. ) ) FIRST GUARANTY FINANCIAL ) CORPORATION, et al., ) ) Defendants. ) ____________________________________) 1:11-CV-1096 AWI MJS ACKNOWLEDGMENT OF NOTICE OF BANKRUPTCY AND ORDER FOR ADDITIONAL BRIEFING 14 15 This case involves the attempted foreclosure by Defendants against real property owned 16 by Plaintiff. On July 6, 2011, the Court granted Plaintiff’s motion for temporary restraining 17 order. The order prevented Defendants from foreclosing on Plaintiff’s real property, and set a 18 briefing schedule and hearing date for Plaintiff’s motion for preliminary injunction. Following 19 the issuance of the temporary restraining order, the parties on several occasions stipulated to 20 continue the deadlines and effectiveness of the temporary restraining order. Currently, hearing 21 on Plaintiff’s motion for preliminary injunction is set for October 24, 2011, and Plaintiff’s reply 22 memoranda is due on October 17, 2011. See Court’s Docket Doc. No. 19. Defendants have filed 23 an opposition, but have filed no motions or answers. 24 On October 11, 2011, Plaintiff filed a notice of Chapter 7 bankruptcy. The automatic 25 bankruptcy stay applies to actions “brought against the debtor.” 11 U.S.C. § 362(a). The 26 automatic stay provisions do not apply to lawsuits brought by the debtor. See In re Palmdale 27 Hills Props., LLC, - - - F.3d - - -, 2011 U.S. App. LEXIS 15907, *13 (9th Cir. 2011); Snavely v. 28 1 Miller, 397 F.3d 726, 729 (9th Cir. 2005); Martin-Trigona v. Champion Fed. Sav. & Loan Ass’n, 2 892 F.2d 575, 577 (7th Cir. 1989); Cobb v. Aurora Loan Servs., 408 B.R. 351, 355 (E.D. Cal. 3 2009). Since Plaintiff initiated this lawsuit prior to filing bankruptcy, this case is not subject to 4 the automatic stay. See id. 5 However, once a person files for bankruptcy, a bankruptcy estate is created and that estate 6 includes causes of action that accrued prior to the filing of bankruptcy. See De Pomar v. 7 Equifirst Corp., 2010 U.S. Dist. LEXIS 143216 (C.D. Cal. Feb. 2, 2010); Basilio v. TDR 8 Servicing, 2009 U.S. Dist. LEXIS 120583 (E.D. Cal. Dec. 29, 2009); Cobb, 408 B.R. at 354; 9 Hernandez v. Downey Sav. & Loan Ass’n, 2009 U.S. Dist. LEXIS 21495 (S.D. Cal. Mar. 17, 10 2009). The bankruptcy trustee becomes the real party in interest with respect to the bankruptcy 11 estate assets. See id. Since the claims in this case accrued prior to Plaintiff filing for bankruptcy, 12 it appears that she is no longer the real party in interest and lacks standing to pursue this lawsuit. 13 See id. In light of Plaintiff’s filing bankruptcy, the parties will be directed to file briefing 14 regarding Plaintiff’s standing to pursue this lawsuit, including the preliminary injunction. 15 16 17 Accordingly, IT IS HEREBY ORDERED that: 1. On or by October 17, 2011, as part of her reply memoranda, Plaintiff shall address her 18 standing to pursue this lawsuit (including the preliminary injunction) in light of her filing 19 of bankruptcy; 20 2. On or by October 19, 2011, Defendants shall file a sur-reply that addresses the issue of 21 standing and responds to any arguments that Plaintiff makes regarding her standing in 22 light of the filing of bankruptcy; and 23 3. The October 24, 2011, hearing at this point shall remain on calendar. 24 25 IT IS SO ORDERED. 26 27 Dated: 0m8i78 October 12, 2011 CHIEF UNITED STATES DISTRICT JUDGE 28 2

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