Brink et al v. Bank of New York Mellon et al

Filing 6

FINDINGS and RECOMMENDATIONS signed by Magistrate Judge Carolyn K. Delaney on 2/17/2017 RECOMMENDING that this action as to plaintiff David L. Brink be dismissed without prejudice. Referred to Judge Kimberly J. Mueller. Objections to F&R due within 14 days. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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DAVID L. BRINK, et al.,

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Plaintiffs,

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No. 2:17-cv-0301 KJM CKD PS

v.

FINDINGS AND RECOMMENDATIONS

BANK OF NEW YORK MELLON, et al.,

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Defendants.

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This matter has been referred to the undersigned pursuant to Local Rule 302(c). Upon

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review of the docket, THE COURT FINDS AS FOLLOWS:
In this action, plaintiffs allege claims arising out of an assignment of a deed of trust in

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October 2011 for a residential property located at 4816 Quonset Drive in Sacramento, California.

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This action was commenced on February 13, 2017. Prior to filing the instant action, plaintiff

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David L. Brink filed two bankruptcy actions.1 At no time during the pendency of the bankruptcy

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proceedings did plaintiff David Brink, who was represented by counsel in the bankruptcy

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proceedings, list on any schedule the claims raised in the instant action. In re: Brink, case no. 12-

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29938, ECF No. 10 (Schedule B, filed June 6, 2012, item 21 requiring debtor to list “all

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The court takes judicial notice of the proceedings in in re: David Lidell Brink, Debtor, case no.
12-29938, United States Bankruptcy Court (E.D. Cal.) and in re: David Brink, Debtor, case no.
12-40597 United States Bankruptcy Court (E.D. Cal.).
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contingent or unliquidated claims of every nature, including tax refunds, counterclaims of the

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debtor, and rights to setoff claims” indicated “none”); In re: Brink, case no. 12-40597, ECF No. 1

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(Schedule B, filed November 28, 2012 again omitted any claims under item 21). The debtor was

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dismissed in the first bankruptcy case and the action was terminated on November 6, 2012. In the

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second bankruptcy case, closed on March 1, 2013, the debtor was discharged with a discharge of

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debts in the amount of $437,887.00, including the amount of the mortgage underlying the claims

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in the instant action. In re Brink, 12-40597, ECF No. 12 (Chapter 7 Trustee’s Report of No

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Distribution); ECF No. 18 (Final Decree).
The filing of a bankruptcy petition creates an estate, which includes “‘all legal and

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equitable interests of the debtor in property at the commencement of the case,’” including any

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causes of action. Cusano v. Klein, 264 F.3d 936, 945 (9th Cir. 2001) (quoting 11 U.S.C. §

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541(a)). The estate includes any causes of action that arise in the period between the filing of the

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petition and the final discharge. See In re Kottmeier, 240 B.R. 440, 442 (M.D. Fla. 1999); see

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also Vertkin v. Wells Fargo Home Mortgage, 2010 WL 3619798 at *2 (N.D. Cal. 2010) (if asset

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comes into being after petition filed, effect of failure to file amended schedule listing asset

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precludes debtor from later claiming it has been abandoned by trustee in favor of debtor).

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Because the bankruptcy trustee has the exclusive right to sue on behalf of the estate, the debtor

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loses the capacity to sue in his own name unless the trustee abandons the claim. See Estate of

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Spirtos v. One San Bernardino County Superior Court Case, 443 F.3d 1172, 1175 (9th Cir. 2006).

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Although a trustee may abandon “worthless or low-value assets, including legal claims,” there is

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no abandonment without an affirmative act. See Biesek v. Soo Line Railroad Company, 440 F.3d

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410, 413 (7th Cir. 2006). Assets that are neither abandoned nor administered remain the property

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of the estate even after the case is closed. See In re Lopez, 283 B.R. 22, 28 (9th Cir. BAP 2002);

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see also In re Pace, 146 B.R. 562, 564–66 (9th Cir. BAP 1992), (unscheduled property remains in

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estate after case is closed).

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In this case, plaintiff David Brink never scheduled the claims raised in the instant action in

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his bankruptcy proceedings. As such, the claims remain the property of the estate unless

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abandoned by the trustee. Because there has been no affirmative abandonment, plaintiff David

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Brink lacks standing to proceed in this action.2

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Accordingly, IT IS HEREBY RECOMMENDED that this action as to plaintiff David L.
Brink be dismissed without prejudice.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days

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after being served with these findings and recommendations, any party may file written

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objections with the court and serve a copy on all parties. Such a document should be captioned

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“Objections to Magistrate Judge’s Findings and Recommendations.” Failure to file objections

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within the specified time may waive the right to appeal the District Court’s order. Martinez v.

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Ylst, 951 F.2d 1153 (9th Cir. 1991).

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Dated: February 17, 2017

_____________________________________
CAROLYN K. DELANEY
UNITED STATES MAGISTRATE JUDGE

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Moreover, even if the claims raised herein are abandoned, it appears plaintiff David Brink may
be judicially estopped from bringing this action. See generally Hamilton v. State Farm Fire &
Cas. Co., 270 F.3d 778, 782-85 (9th Cir. 2001); Gonzalez v. County of Yolo, 2014 WL 5115059
(E.D. Cal. 2014).
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