Miller v. Bank of America et al

Filing 9

ORDER DENYING plaintiff's Ex Parte Request for a Temporary Restraining Order, document 4 . The Court further DIRECTS plaintiff to file and serve a brief showing cause why this Court should not dismiss the instant action for lack of jurisdiction with said brief due 14 days from the date of service of this order; response to plaintiff's brief is due 21 days from the date of service of this order; order signed by Chief Judge Anthony W. Ishii on 10/28/2011. (Rooney, M)

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IN THE UNITED STATES DISTRICT COURT FOR THE
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EASTERN DISTRICT OF CALIFORNIA
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DARLENE M. MILLER,
and ROES 1 through 5,000,

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Plaintiffs,
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v.
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BANK OF AMERICA; CONTRYWIDE )
HOME LOAN SERVICER, LP;
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RECONTRUST COMPANY; FEDERAL )
NATIONAL MORTGAGE
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ASSOCIATION; POWER HOUSE
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REALITY; and DOES 1 through 100,
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Defendants.
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____________________________________)

1:11-CV-1775 AWI GSA
ORDER DENYING
PLAINTIFFS’ REQUEST FOR
TEMPORARY RESTRAINING
ORDER AND ORDER TO
SHOW CAUSE

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This is an action for damages, declaratory relief and injunctive relief arising from the

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foreclosure by defendants Bank of America, et al. (“Defendants”) on property securing a loan

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by plaintiff Darlene M. Miller and her husband (hereinafter, “Miller”) located in Turlock,

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California (the “Property”). Currently before the court is an ex parte request for temporary

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restraining order (“TRO”) by Plaintiff to prevent imminent eviction from her home by

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defendant Power House Reality. Miller contends that jurisdiction over this action exists

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pursuant to 28 U.S.C. § 1331. For the reasons that follow, the court will find that Miller

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presumptively lacks standing to bring this action and will order Plaintiff to show cause why

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jurisdiction over this action should be maintained in this court.

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Miller’s 67-page complaint becomes more impenetrable with each reading but

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sufficient facts can be gleaned to determine the probable status of Plaintiff’s action. On or

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about September 19, 2006, the Millers took out what appears to be a re-finance loan (the

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“Loan”) in the sum of $281,600.00 on the Property and executed a promissory note and deed

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of trust in favor of Country Wide Home Loan Servicing. Doc. # 1 ¶¶ 69 and 70. On or about

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June 2010 the Loan became delinquent. Although Miller engaged a law firm to obtain a loan

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modification, a notice of foreclosure was filed on March 28, 2011. Id. at § 80. On April 11,

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2011, Defendant Recontrust Company recorded a Trustee’s Deed Upon Sale in favor of

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Defendant Federal National Mortgage Association reflecting the sale of the foreclosed

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Property. On September 23, 2011, Miller filed for bankruptcy under Chapter 7 of the

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Bankruptcy Code in the Modesto branch Bankruptcy Court in case number 11-93375.

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The automatic bankruptcy stay applies to actions “brought against the debtor.” 11

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U.S.C. § 362(a). The automatice stay provisions do not apply to lawsuits brought by the

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debtor. See Snavely v. Miller, 397 F.3d 726, 729 (9th Cir. 2005). However, once a person

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files for bankruptcy, a bankruptcy estate is created and that estate includes causes of action

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that accrued prior to the filing of bankruptcy. See DePomar v. Equifirst Corp., 2010 U.S.

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Dist. LEXIS 143216 (C.D. Cal. Feb. 2, 2010); Basilio v. TDR Servicing, 2009 U.S. LEXIS

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120583 (E.D. Cal. Dec. 29, 2009). The bankruptcy trustee becomes the real party in interest

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with respect to the bankruptcy estate assets. Those assets include any causes of action

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belonging to the debtor that accrued prior to the filing of bankruptcy. DePomar, 2010 U.S.

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Dist. LEXIS 143216.

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Since the underlying claims in this case attack the validity of the foreclosure and

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Trustee’s sale of the property, those claims accrued not later that the date of the Trustee’s

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sale, which was on or before April 11, 2011; well before Miller’s bankruptcy filing. Because

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the claims asserted in Miller’s action accrued before the bankruptcy filing, the claims now

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belong to the bankruptcy estate, not to Miller. The trustee of Miller’s bankruptcy estate is

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currently the real party in interest and the only person who may bring an action on behalf of

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the estate. The court concludes Miller presumptively lacks standing to bring the action that

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was filed in this court on October 25, 2011. Prior to dismissal of this action for lack of

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jurisdiction, the court will require the parties to brief the issue of Miller’s standing. Because

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it appears to the court that the underlying case must ultimately be dismissed because Miller is

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not the real party in interest, Miller’s request for temporary restraining order will be denied.

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As something of an aside, the court questions whether Miller’s request for temporary

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restraining order is proper in this court in any event, given that the action Miller seeks to

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prevent – her eviction – is probably a proceeding now before the Stanislaus County Superior

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Court, not this court.

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Pursuant to the foregoing discussion, it is hereby ORDERED that:
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Miller shall file and serve a brief showing cause why this court should not dismiss the

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instant action for lack of jurisdiction because Miller is not the real party in interest in

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light of her bankruptcy filing and therefore lacks standing. Miller’s brief showing

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cause shall be filed and served not later than fourteen (14) days from the date of

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service of this order.

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2.

Not later than twenty-one (21) days from the date of this order defendant Bank of

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America shall file a response to Miller’s brief. If Miller does not file a brief in the

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allotted period of time, Defendant Bank of America shall so notify the court and shall

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request dismissal of this action.

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3.

Miller’s ex parte request for temporary restraining order is hereby DENIED.

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IT IS SO ORDERED.

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Dated:
0m8i78

October 28, 2011
CHIEF UNITED STATES DISTRICT JUDGE

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