Cagle v. C&S Wholesale Grocers, Inc. et al

Filing 25

MEMORANDUM and ORDER signed by Chief Judge Morrison C. England, Jr on 2/19/14 ORDERING that Defendants' MOTION for Judgment on the Pleadings 5 is GRANTED; The Clerk is ordered to enter Judgment for Defendants and close this case. CASE CLOSED. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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CASEY CAGLE,

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Plaintiff,

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No. 2:13-cv-02134-MCE-KJN

v.

MEMORANDUM AND ORDER

C&S WHOLESALE GROCERS INC.,
et al.,
Defendants.

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Through this action, Plaintiff Casey Cagle (“Plaintiff”) seeks relief from Defendants

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C&S Wholesale Grocers, Inc. (“C&S”) and Tracy Logistics, LLC (“Tracy Logistics”)

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(collectively “Defendants”) for wage and hour violations of the California Labor Code and

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California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. Presently

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before the Court is Defendants’ Motion for Judgment on the Pleadings pursuant to

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Federal Rule of Civil Procedure 12(c)1 (“Motion”). Mot., Oct. 16, 2013, ECF No. 5.

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Plaintiff filed a timely opposition. Opp’n, Nov. 4, 2013, ECF No. 11. For the reasons set

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forth below, Defendants’ Motion is GRANTED.2

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All further reference to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless
otherwise noted.
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Because oral argument would not be of material assistance, the Court ordered this matter
submitted on the briefs pursuant to E.D. Cal. Local Rule 230(g).

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BACKGROUND

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Plaintiff’s Claims3

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A.

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Defendants employed Plaintiff as a warehouse supervisor at their Stockton

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Facility from September 2010 to May 2011. Plaintiff alleges both that he was hired by

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Defendants and misclassified as an “exempt” employee, and that he was paid on a

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salary basis, without any compensation for overtime hours worked, missed meal periods,

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or rest breaks.

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Plaintiff further alleges that he worked over eight hours per day, and/or more than

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forty hours per week during the course of his employment with Defendants. Plaintiff also

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alleges that although Defendants knew or should have known that he was entitled to

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receive certain wages as overtime compensation, he did not receive such wages.

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Similarly, Plaintiff did not receive all rest and meal periods that he was entitled to

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receive, nor did he receive one additional hour of pay when he missed a meal period.

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Additionally, Plaintiff alleges that while Defendants knew or should have known that he

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was entitled to receive at least minimum wages as compensation, he was not

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compensated at a rate of at least minimum wage for all hours worked.

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Plaintiff further alleges that he was entitled to timely payment of all wages during

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his employment and to timely payment of wages earned upon termination, but that he

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did not receive timely payment of these wages either during his employment or upon

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termination. Plaintiff likewise did not receive complete and accurate wage statements

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from Defendants, even though Defendants knew or should have known that Plaintiff and

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was entitled to these statements. Defendants also failed to keep complete and accurate

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payroll records. Finally, Plaintiff contends that Defendants falsely represented to him

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that the wage denials were proper, even though these wage denials were improper and

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served the purpose of increasing Defendants’ profits.

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The following recitation of facts is taken, at times verbatim, from Plaintiff’s Complaint and
Defendants’ Notice of Removal.

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B.

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On October 8, 2010, Plaintiff commenced Case Number 10-46860 in the United

Plaintiff’s Bankruptcy Proceedings

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States Bankruptcy Court for the Eastern District of California, on behalf of himself and

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his wife Joanna Christine Cagle (“the Joint Debtor”). Plaintiff did not disclose this

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pending lawsuit on any of his bankruptcy schedules or in any of his filings, although

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Plaintiff was required to disclose “other contingent and unliquidated claims of every

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nature.” On April 20, 2011, Plaintiff signed a declaration under penalty of perjury stating

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that “a lawsuit exists against C&S Wholesale Grocers, Inc. and Tracy Logistics LLC” and

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he “was specifically told that [he] could participate in the lawsuit.”

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On April 25, 2011, Plaintiff and the Joint Debtor filed Amended Schedules. They

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filed another Amended Schedule on September 13, 2011. Neither Amended Schedule

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disclosed Plaintiff’s claims against Defendants. On January 30, 2012, in support of their

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Motion/ Application to Confirm the Chapter 13 Plan, Plaintiff and the Joint Debtor signed

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a declaration, under penalty of perjury, attesting that they had listed all of their assets in

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Schedule B.

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Then, on May 9, 2012, an attorney for Plaintiff in this case requested documents

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from Defendant pursuant to the California Labor Code to investigate Plaintiff’s potential

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claims for this case, which had not yet been filed on Plaintiff’s behalf. This action was

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filed in state court on July 22, 2013. On August 30, 2012, Plaintiff and the Joint Debtor

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filed a Motion/Application to Modify Chapter 13 Plan. In support of the Motion, Plaintiff

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and the Joint Debtor signed another declaration under penalty of perjury, stating that

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they had listed all of their assets in Schedule B.

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On April 26, 2013, the Chapter 13 Trustee filed a Notice of Default and

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Application to Dismiss based upon delinquent payments by Plaintiff and the Joint Debtor.

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On July 22, 2013, Plaintiff filed the Complaint in this case in Sacramento County

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Superior Court. On August 2, 2013, the Chapter 13 Trustee filed another Notice of

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Default and Application to Dismiss based on Plaintiff and the Joint Debtor’s delinquent

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payments.
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On September 16, 2013, Plaintiff formally served Defendant C&S with the Complaint in

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this action. Review of the bankruptcy docket shows Plaintiff’s Plan was amended on

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November 19, 2013, to include this case.

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STANDARD

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Under Federal Rule of Civil Procedure 12(c), “a party may move for judgment on

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the pleadings” after the pleadings are closed “but early enough not to delay trial.” A

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motion for judgment on the pleadings pursuant to Rule 12(c) challenges the legal

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sufficiency of the opposing party's pleadings. See, e.g., Westlands Water Dist. v.

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Bureau of Reclamation, 805 F. Supp. 1503, 1506 (E.D. Cal. 1992). Any party may move

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for judgment on the pleadings under Rule 12(c) after the pleadings are closed but within

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such time as to not delay trial.

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A motion for judgment on the pleadings should only be granted if “the moving

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party clearly establishes on the face of the pleadings that no material issue of fact

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remains to be resolved and that it is entitled to judgment as a matter of law.’” Hal Roach

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Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989).

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Judgment on the pleadings is also proper when there is either a “lack of cognizable legal

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theory” or the “absence of sufficient facts alleged under a cognizable legal theory.”

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Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). In reviewing a Rule

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12(c) motion, “all factual allegations in the complaint [must be accepted] as true and

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construe[d] . . . in the light most favorable to the non-moving party.” Fleming v. Pickard,

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581 F.3d 922, 925 (9th Cir. 2009). Judgment on the pleadings under Rule 12(c) is

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warranted “only if it is clear that no relief could be granted under any set of facts that

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could be proved consistent with the allegations.” Deveraturda v. Globe Aviation Sec.

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Servs., 454 F.3d 1043, 1046 (9th Cir. 2006) (internal citations omitted).

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Although Rule 12(c) does not mention leave to amend, courts have the discretion

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in appropriate cases to grant a Rule 12(c) motion with leave to amend, or to simply grant

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dismissal of the action instead of entry of judgment. See Lonberg v. City of Riverside,

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300 F. Supp. 2d 942, 945 (C.D. Cal. 2004); Carmen v. S.F. Unified Sch. Dist., 982 F.

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Supp. 1396, 1401 (N.D. Cal. 1997).

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ANALYSIS

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In the bankruptcy context, a party is “judicially estopped from asserting a cause of

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action not . . . mentioned in the debtor’s schedules or disclosure statements.” Hamilton

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v. State Farm Fire & Cas. Co., 270 F.3d 778, 782-83 (9th Cir. 2011). “Judicial estoppel

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will be imposed when the debtor has knowledge of enough facts to know that a potential

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cause of action exists during the pendency of the bankruptcy, but fails to amend his

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schedules or disclosure statements to identify the cause of action as a contingent asset.”

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Id. at 784 (citing Hay v. First Interstate Bank of Kalisepll, N.A., 978 F.2d 555, 557 (9th

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Cir. 1992) (“We recognize that all facts were not known to Desert Mountain at that time,

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but enough was known to require notification of the asset to the bankruptcy court.”); In re

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Coastal Plains, 179 F.3d 197, 208 (5th Cir. 1999) (“[I]f the debtor has enough

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information . . . prior to confirmation to suggest that it may have a possible cause of

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action, then that is a known cause of action such that it must be disclosed”) (internal

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quotations omitted). Thus, “[a] plaintiff who fails to fulfill this duty to inform the bankruptcy

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court of his claims risks having those claims barred by judicial estoppel.” Becker v.

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Wells Fargo Bank, N.A., 2012 WL 5187792 (E.D. Cal. Oct. 18, 2012). “The reason is

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that the plaintiff-debtor represented in the bankruptcy case that no claim existed, so he

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or she is estopped from representing in the lawsuit that a claim does exist.” Ah Quin v.

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Cnty. of Kauai Dep't of Transp., 733 F.3d 267, 271 (9th Cir. 2013).

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In determining whether to apply judicial estoppel, courts employ a three part test:

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(1) whether a party’s later position is clearly inconsistent with its original position; (2)

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whether the party has successfully persuaded the court of the earlier position; and (3)

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whether allowing the inconsistent position would allow the party to derive an unfair

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advantage or impose an unfair detriment to the opposing party. United States v.

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Ibrahim, 522 F.3d 1003, 1009 (9th Cir. 2008).

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Plaintiff does not dispute that the first two elements are met, but rather argues

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that Plaintiff was not required to disclose his potential claims as a putative member of a

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class action. However, Plaintiff provides no authority for this proposition, and Plaintiff is

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proceeding in this action on his own behalf rather than as a part of the class. Plaintiff

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also argues that Defendants fail to show that Plaintiff gained any advantage from his

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non-disclosure. However, Plaintiff obtained the automatic stay by filing his bankruptcy

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petition. The benefit of the automatic stay is a sufficient “unfair advantage” to satisfy the

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third prong of the analysis. See Becker, 2012 WL 5187792 at *4 (citing 11 U.S.C.

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§ 362(a); Hamilton, 270 F.3d at 785 (finding unfair advantage where plaintiff enjoyed

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“the benefit of both an automatic stay and a discharge of debt in his Chapter 7

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bankruptcy proceedings”); HPG Corp. v. Aurora Loan Servs., LLC, 436 B.R. 569, 578

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(E.D. Cal. 2010) (finding it sufficient for the application of judicial estoppel that plaintiffs

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received the benefit of automatic stays although bankruptcy cases were dismissed). “In

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doing so, [Plaintiff] ‘sought bankruptcy protection while subverting the bankruptcy

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process by nondisclosure.” Becker, 2012 WL 5187792 at *4. Accordingly, the Court

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finds that it is appropriate to invoke judicial estoppel to protect the integrity of the

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bankruptcy process.

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Finally, Plaintiff argues that his non-disclosure was inadvertent or mistaken

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because Plaintiff did not realize he had an ongoing obligation to disclose claims. A

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court is not “bound” to apply judicial estoppel, particularly when “a party's prior position

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was based on inadvertence or mistake.” Ah Quin, 733 F.3d at 272 (quoting New

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Hampshire v. Maine, 532 U.S. 742, 753 (2001)).
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The Ninth Circuit observed in Ah Quin that “[i]f Plaintiff's bankruptcy omission was

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mistaken, the application of judicial estoppel in this case would do nothing to protect the

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integrity of the courts, would enure to the benefit only of an alleged bad actor [the

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defendants in this case], and would eliminate any prospect that Plaintiff's unsecured

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creditors might have of recovering.” 733 F.3d at 276. In Ah Quin, “the district court

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applied a ‘narrow interpretation’ of [the terms ‘inadvertent or mistaken] and held that,

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because the plaintiff-debtor knew about the claim and had a motive to conceal it, the

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omission was not ‘inadvertent or mistaken’ as a matter of law.” Dzakula v. McHugh, --

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F.3d – , 2014 WL 128605, *1 (Jan. 15, 2014) (emphasis in original). The Ninth Circuit

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reversed, holding “that ‘the ordinary understanding of mistake and inadvertence’—not

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the narrow interpretation applied by the district court—applies.” Id. (citing Ah Quin, 733

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F.3d at 277).

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Here, as in Ah Quin and Dzakula, Plaintiff filed false (i.e. materially incomplete)

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bankruptcy schedules and did not amend those scheduled until nearly a month after

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Defendants filed the instant motion, “suggesting [Plaintiff’s] omission had not been

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inadvertent.” Dzakula, 2014 WL 128605 at *2. Plaintiff filed a declaration stating that

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“the first time that I realized I personally had wage and hour claims against my employer

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was in July 2013,” and “before today [November 3, 2013] I was not aware that I had an

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ongoing obligation to disclose my claims related to any litigation as an asset in my

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bankruptcy proceedings.” ECF No. 11-1 at 2.

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First, the Court notes that Plaintiff’s affidavit contains a total of three paragraphs,

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only two of which contain statements material to the issue at bar. The statements are

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completely conclusory and lack any sort of detailed factual support. “A conclusory, self-

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serving affidavit, lacking detailed facts and any supporting evidence, is insufficient to

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create a genuine issue of material fact.” F.T.C. v. Publ'g Clearing House, Inc., 104 F.3d

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1168, 1171 (9th Cir. 1997) (citing Hansen v. United States, 7 F.3d 137, 138 (9th Cir.

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1993); United States v. One Parcel of Real Property, 904 F.2d 487, 492 n. 3 (9th Cir.

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1990)).
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Accordingly, the Court finds that this affidavit is not sufficient to create a genuine issue of

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fact as to whether Plaintiff’s failure to disclose his claims was the result of mistake or

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inadvertence.

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Furthermore, the statements contained in Plaintiff’s affidavit are plainly

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contradicted by the fact that Plaintiff signed a declaration under the penalty of perjury in

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2011, acknowledging that he understood that he could participate in a current lawsuit

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against his employer. In Hamilton, the court specifically stated that it was “immaterial”

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that the plaintiff did not file his action against the defendant “for one year after filing for

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bankruptcy. Judicial estoppel will be imposed when the debtor has knowledge of

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enough facts to know that a potential cause of action exists during the pendency of the

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bankruptcy, but fails to amend his schedules or disclosure statements to identify the

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cause of action as a contingent asset.” 270 F.3d at 784. Here, there is no question that

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Plaintiff had knowledge of the facts giving rise to the lawsuit as of April 2011. Plaintiff

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certainly had knowledge of his claims after he filed this case in July 2013, and Plaintiff

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still did not amend his schedules or disclosure statements until November 2013.

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Additionally, the fact that Plaintiff and the Joint Debtor filed multiple Amended

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Schedules, as well as declarations signed under penalty of perjury attesting that Plaintiff

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and the Joint Debtor had listed all of their assets in Schedule B, suggests that Plaintiff

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did indeed know that he had a duty to disclose new claims.

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The Court therefore finds that Plaintiff’s claim of inadvertence or mistake is simply

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not plausible, and there is no issue of fact as to whether Plaintiff’s failure to disclose the

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claims was the result of mistake or inadvertence. Accordingly, Defendants’ Motion is

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granted.

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CONCLUSION

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For the reasons just stated, Defendants’ Motion for Judgment on the Pleadings,

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ECF No. 5, is GRANTED. The Clerk of the Court is hereby ordered to enter judgment

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for Defendants and close this case.

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IT IS SO ORDERED.

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Dated: February 19, 2014

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