Bencivenga v. US Bank, National Association et al

Filing 47

ORDER STAYING ACTION (Illston, Susan) (Filed on 3/29/2012)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 MARC ANTHONY BENCIVENGA, 9 Plaintiff, United States District Court For the Northern District of California 10 11 12 13 14 No. C 11-04128 SI ORDER STAYING ACTION v. US BANK, NATIONAL ASSOCIATION, as Trustee of GSAA HOME EQUITY TRUST, Series 2005-11, BARRETT DAFFIN FRAPPIER TREDER & WEISS LLP, GRACE EVERITT, DOES 1-10 Defendant. / 15 16 Before the Court is defendants’ motion to dismiss plaintiff’s First Amended Complaint (“FAC”). 17 The motion is scheduled for a hearing on March 30, 2012. For the reasons set forth below, the Court 18 VACATES the hearing and STAYS the action pending notification regarding whether plaintiff’s 19 bankruptcy trustee abandons plaintiff’s claims. 20 21 BACKGROUND 22 On or about June 6, 2005, plaintiff Marc Anthony Bencivenga purchased a home (the 23 “Property”) at 2054 Oak Ridge Drive, Santa Rosa, California 95404 in Sonoma County. FAC ¶ 14. On 24 June 28, 2005, plaintiff signed a Deed of Trust for $568,000 identifying Residential Mortgage Capital 25 as the “lender” and First American Title as “trustee.” Defendants’ Request for Judicial Notice (“RJN”) 26 27 28 1 Exhibit A.1 Mortgage Electronic Registration Systems, Inc. (“MERS”) retained a beneficial interest 2 under the Deed of Trust. Id. On August 27, 2010, NDEx West, LLC recorded a Notice of Default and Election to Sell Under 4 Deed of Trust on the Property. RJN, Exhibit B. In issuing this notice, NDEx West purported to act as 5 the agent of MERS, the beneficiary of the trust. RJN, Exhibit B at 2. Attached to the notice is a 6 certification that NDEx West followed California non-judicial foreclosure procedure under Cal. Civ. 7 Code § 2923.5 by contacting or performing due diligence by attempting to contact the borrower 8 regarding the foreclosure notice. Id. at 3. On September 17, 2010, an Assignment of Deed of Trust was 9 recorded on the property, granting defendant U.S. Bank all beneficial interest set forth under the Deed 10 United States District Court For the Northern District of California 3 of Trust. RJN, Exhibit C. On October 1, 2010, a Substitution of Trustee was filed on the Property 11 replacing original trustee First American Title with NDEx West. RJN, Exhibit D. The Substitution of 12 Trustee was executed by Xee Moua, who, according to the FAC, has admitted that she did not verify 13 all of the information in filings she signed. FAC ¶ 20. On December 1, 2010, a Notice of Trustee’s Sale 14 was recorded on the property by NDEx West. RJN, Exhibit E. 15 Plaintiff thereafter filed for Chapter 7 Bankruptcy protection on March 8, 2011, which was 16 discharged on June 16, 2011. RJN, Exhibit F. On July 15, 2011, the Property was sold at public auction 17 to U.S. Bank. RJN, Exhibit G. Plaintiff did not list the claims asserted in this action on his bankruptcy 18 schedule of assets. 19 On August 22, 2011, plaintiff filed this action in pro per against defendants U.S. Bank National 20 Association as trustee for GSAA Home Equity Trust, Series 2005-11, Barrett Daffin Frappier Treder 21 & Weiss, LLP, Grace Everitt, and Does 1-20. After defendants filed a motion to dismiss asserting that 22 plaintiff lacked standing due to his failure to list the claim on his bankruptcy schedule, and on plaintiff’s 23 averment that he would retain an attorney, the Court dismissed his original complaint without prejudice. 24 On January 31, 2012, plaintiff reopened his bankruptcy petition and listed the claims he makes in the 25 26 27 28 1 Defendants request that the Court take judicial notice of eight documents related to the foreclosure and bankruptcy. The Court has already taken judicial notice of the Deed of Trust, Notice of Default, Trustee Sales, and Bankruptcy Petition of this property. Order Granting Defendants’ Motion to Dismiss at n.1. [docket 31]. The Court now takes judicial notice of the balance, only for purposes of the dates of filing. Fed. R. Evid. 201. 2 1 amended complaint, valuing them at $6,441. RJN, Exhibit H at 7. He then filed the amended complaint 2 on February 1, 2012. 3 On February 21, 2012, defendant U.S. Bank National Association filed this motion to dismiss 4 plaintiff’s first amended complaint. The next day co-defendants Barrett Daffin Frappier Treder & 5 Weiss, LLP and Grace Everitt moved to join the motion.2 6 7 DISCUSSION Defendant argues that plaintiff has no standing to bring these claims because all of his legal and 9 equitable interests in the Property have been placed in a bankruptcy estate. Defs.’ Mot. at 5. The Court 10 United States District Court For the Northern District of California 8 agrees. When a bankruptcy petition is filed, an estate is created that consists of “all legal or equitable 11 interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541(a)(1). “Once 12 an individual declares bankruptcy, any legal or equitable interests he or she had in a particular property 13 belong to the bankruptcy estate, as represented by the bankruptcy trustee. Absent abandonment of an 14 asset, the trustee remains the sole representative of the estate.” Vertkin v. Wells Fargo Home Mortgage, 15 No. C 10-00775, 2010 WL 3619798, *2 (N.D. Cal. 2010) (Seeborg, J.). Plaintiff reopened his 16 bankruptcy petition on January 31, 2012, listing the claims at issue here as an asset therein. He then 17 filed the FAC, asserting those claims, on February 1, 2012. The right to bring this action is vested in 18 the bankruptcy estate. Plaintiff can only bring his claim if the bankruptcy trustee has abandoned it. 19 A bankruptcy estate can abandon the property of an estate in three ways. 15 U.S.C. § 554. First, 20 after a noticed motion and hearing, the trustee can formally abandon property “that is burdensome to 21 the estate or that is of inconsequential value and benefit to the estate.” 15 U.S.C. § 554(a). Second, the 22 court may order the trustee to abandon the burdensome or valueless property after a noticed motion and 23 hearing. § 554(b). Third, the trustee can abandon certain property at the closing of the bankruptcy case. 24 § 554(c). 25 Plaintiff informs the Court that “[t]here has been much communication between the bankruptcy 26 2 27 28 Defendants Barrett Daffin Frappier Treder & Weiss, LLP and Grace Everitt move to join defendant U.S. Bank’s motion to dismiss. Plaintiff has not made any individual allegations against these defendants. Defendant U.S. Bank’s motion to dismiss presents issues common to all defendants. The motion to join is GRANTED. 3 1 trustee and Plaintiff’s counsel in full disclosure of the complaint and the details of the claims. Plaintiff 2 has recently been informed by Timothy Hoffman, the Chapter 7 bankruptcy trustee for the Plaintiff’s 3 re-opened bankruptcy, that he intends to abandon all claims and instructed our office to file a response.” 4 Plf’s. Opp. at 3. Plaintiff states that his office will provide supplemental information to the Court as 5 soon as the claims are abandoned. Id. As of this date, the bankruptcy trustee has not abandoned plaintiff’s claims, nor has he entered 7 into a written stipulation, approved by the bankruptcy court, allowing plaintiff to proceed with his 8 claims. Plaintiff does not have standing to pursue his claims at this time. See Estate of Spirtos v. One 9 San Bernardino County Superior Court Case Numbered SPR 02211, 443 F.3d 1172, 1175 (9th Cir. 10 United States District Court For the Northern District of California 6 2006). Given that plaintiff has indicated that the bankruptcy trustee is in the process of abandoning 11 these claims, the Court STAYS this action. Plaintiff is ordered to notify the Court immediately 12 if/when his bankruptcy estate abandons the claims, at which time the Court will reset a hearing 13 on this motion. Similarly, plaintiff is ordered to notify the Court if the bankruptcy trustee 14 declines to abandon the claims. If the bankruptcy estate has taken no action by April 27, 2012, 15 plaintiff is ordered to notify the Court of the status of the claims within the bankruptcy estate. 16 17 IT IS SO ORDERED. 18 19 Dated: March 29, 2012 SUSAN ILLSTON United States District Judge 20 21 22 23 24 25 26 27 28 4

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