Momoh v. Wells Fargo Bank NA
Filing
31
ORDER by Judge Haywood S. Gilliam, Jr. DENYING DEFENDANT'S 15 MOTION TO DISMISS; SETTING CASE MANAGEMENT CONFERENCE. (ndrS, COURT STAFF) (Filed on 7/1/2016)
1
2
3
4
UNITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
7
RAMAT B MOMOH,
Plaintiff,
8
v.
9
10
WELLS FARGO BANK NA,
Defendant.
11
United States District Court
Northern District of California
Case No. 15-cv-04729-HSG
ORDER DENYING DEFENDANT'S
MOTION TO DISMISS; SETTING
CASE MANAGEMENT CONFERENCE
Re: Dkt. No. 15
12
13
Before the Court is Defendant Wells Fargo Bank, N.A’s (“Defendant”) motion to dismiss
14
the complaint, Dkt. No. 1 (“Compl.”), filed by Plaintiff Ramat B. Momoh (“Plaintiff”). Dkt. No.
15
15 (“Mot.”). Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(6) on the
16
basis that Plaintiff’s ongoing bankruptcy proceeding precludes her claims. Plaintiff has filed an
17
opposition, Dkt. No. 20 (“Opp.”), and Defendant has replied, Dkt. No. 22 (“Reply”).
For the reasons set forth below, the Court DENIES Defendant’s motion to dismiss.
18
19
I.
BACKGROUND
20
A.
21
On January 6, 2014, Plaintiff filed a petition for bankruptcy under Chapter 13 of the United
22
23
Factual Allegations
States Bankruptcy Code. Compl. ¶ 12. The case was confirmed on October 31, 2014. Id.
In or around March 2015, Defendant began calling Plaintiff’s cell phone to attempt to
24
collect a purported debt. Id. ¶¶ 13-14. Plaintiff told the caller that she had filed for bankruptcy
25
and told Defendant to contact her bankruptcy attorney. Id. ¶ 15. She suspects that the calls were
26
made using an automated telephone dialing system because she heard a short pause before the
27
caller began speaking. Id. ¶ 16. Even though Plaintiff instructed Defendant to not contact her any
28
further, Defendant called her several more times. Id. ¶¶ 19-20. Defendant also sent collection
1
letters and account statements to Plaintiff. Id. ¶ 21 & Ex. A. On April 9, 2015 and again on May
2
7, 2015, a notice was placed on the front door of Plaintiff’s residence asking her to contact
3
Defendant. Id. ¶¶ 22-23 & Exs. B & C. Defendants’ conduct has caused Plaintiff extreme
4
emotional distress and mental anguish. Id. ¶ 24.
5
B.
Procedural History
6
On October 13, 2015, Plaintiff filed the instant lawsuit against Defendant. She asserts that
7
Defendant’s debt collection activities violated the Telephone Consumer Protection Act, 27 U.S.C.
8
§ 227, et seq. (“TCPA”), and the Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code §
9
1788, et seq. (“Rosenthal Act”). Compl. ¶¶ 26-31.
Defendant now moves to dismiss. Defendant contends that Plaintiff has failed to state a
10
United States District Court
Northern District of California
11
claim upon which relief can be granted for three independent reasons. First, Defendant argues that
12
Plaintiff is judicially estopped from raising any claims that were not mentioned in her bankruptcy
13
plan or raised in the bankruptcy court before Defendant filed its motion to dismiss. Mot. at 4-9;
14
Reply at 2-5. Second, Defendant posits that during the pendency of her bankruptcy, Plaintiff does
15
not have standing to pursue individual claims, but can only pursue claims for the benefit of her
16
bankruptcy estate, on whose behalf she does not sue. Id. at 9-11. And third, Defendant argues
17
that Plaintiff’s claims are preempted by the Bankruptcy Code. Id. at 11-12.
18
II.
REQUEST FOR JUDICIAL NOTICE
19
Before turning to the substance of the motion, the Court addresses Defendant’s request for
20
judicial notice. Dkt. No. 16 (“RJN”). The materials of which Defendant seeks notice include: (1)
21
the docket for Plaintiff’s bankruptcy case; (2) Defendant’s proof of claim on Plaintiff’s debt; (3)
22
Plaintiff’s Chapter 13 bankruptcy plan; and (4) the bankruptcy court’s confirmation order. Id. at 1.
23
The doctrine of judicial notice permits district courts to take as true “a fact that is not
24
subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial
25
jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot
26
reasonably be questioned.” Fed. R. Evid. 201(b). The existence of proceedings in other courts,
27
including orders, is the proper subject of judicial notice when those materials are directly related to
28
the case. Tigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011) (internal citations omitted). But it
2
1
is inappropriate to take judicial notice of facts contained in other filings and orders from other
2
proceedings for the truth of the matters they assert. See Lasar v. Ford Motor Co., 399 F.3d 1101,
3
1117, n.14 (9th Cir. 2005) (declining to take judicial notice of factual findings made in another
4
proceeding “because [defendants were] offering the factual findings contained in the order for the
5
purpose of proving the truth of the factual findings contained therein”).
The Court takes judicial notice of the materials from Plaintiff’s bankruptcy proceeding to
6
7
the extent that they are offered to explain the procedural posture of this action. See Tigueros, 658
8
F.3d at 987. But the Court declines to take judicial notice to the extent that Defendant offers these
9
materials for the truth of the matters they assert therein. See Lasar, 399 F.3d at 1117, n.4.
10
III.
Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain
11
United States District Court
Northern District of California
LEGAL STANDARD
12
statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to
13
dismiss a complaint for failing to state a claim upon which relief can be granted under Federal
14
Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the
15
complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.”
16
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule
17
12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on
18
its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 540, 570 (2007). A claim is facially plausible
19
when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that
20
the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
21
In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as
22
true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v.
23
St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Courts do not, however,
24
“accept as true allegations that are merely conclusory, unwarranted deductions of fact, or
25
unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
26
IV.
27
28
DISCUSSION
Turning to the substance of Defendant’s motion, the Court considers: (1) whether Plaintiff
should be judicially estopped from asserting her claims because she did not raise them in her
3
1
bankruptcy proceedings until after Defendant moved to dismiss this case; (2) whether Plaintiff has
2
standing to assert her claims not on behalf of her estate; and (3) whether the Bankruptcy Code
3
preempts Plaintiff’s claims. For the reasons set forth below, the Court rejects each of Defendant’s
4
arguments.
5
A.
Judicial Estoppel
6
Defendant contends that the equitable doctrine of judicial estoppel should bar Plaintiff’s
7
complaint because she did not disclose the claims she asserts in this action to the bankruptcy court
8
until after Defendant moved to dismiss this case. Defendant argues that this conduct violated
9
Plaintiff’s continuing obligation to report her assets and is inconsistent with Plaintiff’s position in
10
this litigation that she has claims against Defendant. Plaintiff responds that judicial estoppel does
United States District Court
Northern District of California
11
12
13
14
15
16
17
18
19
20
21
22
23
not apply because her claims accrued only after confirmation of her Chapter 13 bankruptcy plan.
In addition, Plaintiff points out that she has now amended her asset schedule in the bankruptcy
proceedings to include her claims in this suit in an abundance of caution. Opp. at 7-8 & Ex. A.
The equitable doctrine of judicial estoppel “protect[s] the integrity of the judicial process
by prohibiting parties from deliberately changing positions according to the exigencies of the
moment.” New Hampshire v. Maine, 532 U.S. 742, 750 (2001). Invocation of the doctrine lies
within a court’s discretion and is generally informed by the following facts: (1) whether a party’s
current litigation position is “clearly inconsistent” with an earlier position it has taken; (2) whether
a court accepted and relied upon the party’s earlier position; and (3) whether the party seeking to
now assert the inconsistent position would derive an unfair advantage if not estopped from doing
so. Id. at 750-51. And because judicial estoppel is an equitable doctrine, courts in the Ninth
Circuit generally also consider whether the party to be estopped acted inadvertently or with any
degree of intent. See Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001).
“In the bankruptcy context, the federal courts have developed a basic default rule: If a
24
plaintiff-debtor omits a pending (or soon-to-be-filed) lawsuit from the bankruptcy schedules and
25
obtains a discharge (or plan confirmation), judicial estoppel bars the action.” Ah Quin v. Cnty. of
26
Kauai Dep’t of Transp., 733 F.3d 267, 271 (9th Cir. 2013); accord Hamilton, 270 F.3d at 784
27
(holding that a debtor-plaintiff is precluded from pursuing claims about which he had knowledge,
28
but did not disclose, during his bankruptcy proceedings that resulted in a discharge of debt); Hay
4
1
v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir. 1992) (same). “The reason
2
is that the plaintiff-debtor represented in the bankruptcy case that no claim existed, so he or she is
3
estopped from representing in the lawsuit that a claim does exist.” Ah Quin, 733 F.3d at 271. In
4
those situations, courts generally “apply a presumption of deliberate manipulation” and need not
5
inquire into whether a plaintiff's bankruptcy omission was inadvertent or mistaken. Id. at 273.
Based on the facts subject to judicial notice and Plaintiff’s allegations, which are accepted
6
7
8
9
10
as true at this stage, the Court must answer two questions to resolve Defendant’s judicial estoppel
claim: (1) is Plaintiff estopped from pursuing its claims in this case because she did not initially
include them in her schedules before the October 2014 confirmation of her bankruptcy plan; and
(2) even if not, should Plaintiff’s failure to amend her bankruptcy schedule to include these claims
until December 2015, after the filing of Defendant’s motion to dismiss, result in estoppel?
11
United States District Court
Northern District of California
The Court has little trouble concluding that the fact that Plaintiff did not disclose these
12
claims before the October 2014 plan confirmation does not support application of judicial
13
14
15
16
estoppel. The reason is simple: no facts, alleged or otherwise judicially noticeable, suggest that
Plaintiff knew about these potential claims before the bankruptcy court confirmed her plan. To the
contrary, taking Plaintiff’s allegations as true, it would have been impossible for Plaintiff to know
about her claims at that time. The bankruptcy court entered its final repayment plan for Plaintiff
17
on October 31, 2014. See RJN, Ex. A. Defendant’s actions that gave rise to Plaintiff’s TCPA and
18
Rosenthal Act claims allegedly occurred between March and May 2015. Compl. ¶¶ 13-23. Given
19
that the bankruptcy court confirmed Plaintiff’s final repayment plan at least four months before
20
Defendant allegedly began to try to collect on her earlier debt, nothing about the absence of these
21
claims from the pre-plan disclosure process in any way suggests deceitful omission on Plaintiff’s
22
part.
23
The closer, and more nuanced, question is whether Plaintiff’s failure to amend her asset
24
schedule in the bankruptcy court until December 9, 2015, just over two weeks after Defendants
25
moved to dismiss this case, supports any different result. Defendant argues that Plaintiff’s failure
26
to disclose the claims at issue in this suit between March 2015 and December 2015 violated her
27
continuing obligation to disclose under 11 U.S.C. § 521(a)(1), and amounted to taking an
28
inconsistent position even though these claims arose after the confirmation of her plan. Mot. at 85
1
9.
2
Bankruptcy Rule 1007 provides that in a Chapter 13 bankruptcy case, a debtor has a duty
3
to file a schedule with the bankruptcy court that lists her assets and liabilities at the time she files
4
her initial petition. Fed. R. Bankr. P. 1007(a)(1), (b)(1); see also 11 U.S.C. § 521(a)(1) (debtor’s
5
duties including filing an asset schedule). But a Chapter 13 debtor also has a continuing duty to
6
7
8
9
10
amend her schedule until the bankruptcy court discharges her debt upon satisfactory completion of
the confirmed repayment plan. Fed. R. Bankr. P. 1007(h) (a debtor’s duty to amend her schedules
continues until a discharge order is entered); 11 U.S.C. § 1328(a) (a discharge order issues after a
confirmed plan is completed); see also Hamilton, 270 F.3d at 785 (“The debtor’s duty to disclose
potential claims as assets does not end when the debtor files schedules, but instead continues for
the duration of the bankruptcy proceeding.”); Donato v. Metropolitan Life Ins. Co., 230 B.R. 418,
11
United States District Court
Northern District of California
421 (N.D. Cal. 1999) (a Chapter 13 debtor who learns of facts giving rise to a civil action after
12
13
14
15
16
filing of bankruptcy petition and schedules “must amend those schedules when he or she becomes
aware of the existence of the action because it is an asset of the bankruptcy estate”).
Plaintiff does not appear to have amended her asset schedule in a timely manner. See Fed.
R. Bankr. P. 1007(h) (a debtor has a duty to amend schedule within 14 days or within such further
time as allowed by the bankruptcy court); RJN, Ex. A. But the bankruptcy court has not taken any
17
formal action since Plaintiff’s plan was confirmed in October 2014, and thus never acted in
18
reliance upon Plaintiff’s omission of these claims. See In re Momoh, Case No. 14-br-40056
19
(Bankr. N.D. Cal.) (Dkt. Nos. 71-77). Without reliance and acceptance by the court in the other
20
proceeding, judicial estoppel is not appropriate. See New Hampshire, 532 U.S. at 750-51. In
21
addition, Plaintiff has amended her asset schedule to include these claims. See Opp., Ex. A.
22
Because the bankruptcy court is now aware of Plaintiffs’ contingent asset in her instant claims, it
23
is impossible for her to derive any unfair advantage from her previous omission. See Ah Quin,
24
733 F.3d at 272-75.
25
Accordingly, the Court finds that judicial estoppel is not warranted on these facts.
26
B.
27
Defendant next contends that Plaintiff has no standing to assert her claims in her name as
28
Standing
opposed to her bankruptcy estate. Mot. at 9-11. The Court disagrees.
6
Although the Supreme Court and the Ninth Circuit have not addressed the issue of whether
2
a Chapter 13 bankruptcy debtor is required to sue in the name of her estate during the pendency of
3
a bankruptcy proceeding, at least one court in this district has. In Donato v. Metropolitan Life
4
Insurance Company, the court followed the Second and Third Circuits to hold that a Chapter 13
5
plaintiff “has concurrent standing with the Chapter 13 trustee to litigate her prepetition causes of
6
action[.]” 230 B.R. at 425. While the claims now at issue arose post-petition, “Chapter 13 debtors
7
have standing to pursue claims against others when those claims belong to the bankruptcy estate
8
because the reality of a filing under Chapter 13 is that debtors are the true representatives of the
9
estate and should be given the broad latitude essential to control the progress of their case.” Id. at
10
425 (emphasis added) (quoting Olick v. Parker & Parsley Petroleum Co., 145 F.3d 513, 515 (2nd
11
United States District Court
Northern District of California
1
Cir. 1998)); accord Maritime Elec. Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1209 n.2 (3d
12
Cir. 1991). By that logic, it does not matter whether the claims arose pre- or post-petition because
13
claims held by the Chapter 13 bankruptcy estate may always be prosecuted by the plaintiff in her
14
own name. The Court thus agrees with the reasoning of Donato and finds that Plaintiff has
15
concurrent standing to litigate the claims at issue in this case.
16
Defendant’s citation to Edwards v. Wells Fargo Bank, N.A., No. CV 13-201, 2013 WL
17
3467215, at *9 (C.D. Cal. Jul. 9, 2013), does not change the analysis. In that case, the court held
18
that a Chapter 13 debtor may assert non-bankruptcy claims on behalf of the bankruptcy estate
19
during the pendency of the bankruptcy proceeding. Id. But Edwards does not hold that a Chapter
20
13 debtor is required to file her claims on behalf of the bankruptcy estate during the pendency of
21
bankruptcy proceedings, see id. In contrast, the Court finds the rationale of Donato to be directly
22
on point, persuasive and conclusive here.
23
Accordingly, the Court denies Defendant’s motion to dismiss for lack of standing.
24
C.
25
Finally, Defendant contends that the Bankruptcy Code preempts Plaintiff’s TCPA and
Preemption
26
Rosenthal Act claims under these circumstances. Mot. at 11-12. The Bankruptcy Code provides
27
that the collection of pre-petition debt is automatically stayed once a debtor petitions for
28
bankruptcy and remains in effect until a creditor successfully moves to lift that stay or the debt is
7
1
discharged. 11 U.S.C. § 362. Defendant contends that because Plaintiff is seeking damages for
2
injuries suffered from Defendant’s alleged efforts to collect a debt that was subject to an automatic
3
bankruptcy stay, this action is tantamount to an attempt to enforce the stay. Id. And because the
4
enforcement of an automatic bankruptcy stays is the exclusive province of bankruptcy courts,
5
Defendant contends that the Bankruptcy Code therefore preempts Plaintiff’s claims.
The Court first finds that the Bankruptcy Code does not preempt Plaintiff’s TCPA claim.
6
7
As an initial matter, a federal statute cannot preempt another federal statute because preemption is
8
an issue of federalism. “When two federal statutes address the same subject in different ways, the
9
right question is whether one implicitly repeals the other—and repeal by implication is a rare bird
indeed.” Randolph v. IMBS, Inc., 368 F.3d 726, 730 (7th Cir. 2004). “Implied repeals are not
11
United States District Court
Northern District of California
10
favored by the courts and will only be found when the new statute is clearly repugnant, in words
12
or purpose, to the old statute.” Nw. Forest Resource Council v. Pilchuck Audubon Soc’y, 97 F.3d
13
1161, 1166 (9th Cir. 1996). The TCPA, in relevant part, proscribes calls to cell phones made
14
using automatic telephone dialing systems. 47 U.S.C. § 227(b)(1)(A)(iii). The Court sees no
15
“irreconcilable conflict” between this provision and the Bankruptcy Code.1
Similarly, the Court finds that the Bankruptcy Code does not preempt Plaintiff’s state law
16
17
18
19
20
Rosenthal Act claim. The Rosenthal Act provides in relevant part that “[n]o debt collector shall
collect or attempt to collect a consumer debt by . . . [c]ausing a telephone to ring repeatedly or
continuously to annoy the person called.” Cal. Civ. Code § 1788.11(d). The Court finds that the
enforcement of that provision would not interfere with a bankruptcy court’s jurisdiction, at least
under the facts alleged in this action, because a finding of liability would not determine whether
21
the automatic bankruptcy stay was violated. This case is unlike MSR Exploration LTD v.
22
Meridian Oil, Inc., 74 F.2d 910 (9th Cir. 1996), the case relied upon by Defendant. There, the
23
24
Ninth Circuit held that a malicious prosecution claim based on a creditor’s bankruptcy claim
would interfere with a bankruptcy court’s ability to control the scope of its proceedings because it
25
26
1
27
28
Defendant argues that Baldwin v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark, 1999 WL
284788, at *4 (N.D. Ill. Apr. 26 1999), held that the Bankruptcy Code impliedly repealed an
FDCPA claim. But Plaintiff does not assert an FDCPA claim in this case, so Baldwin does not aid
Defendant’s cause.
8
1
would necessarily determine the validity of the creditor’s claim and open bankruptcy decisions up
2
to collateral attacks. See MSR Exploration, 74 F.3d at 915. The present case does not implicate
3
these concerns.
Accordingly, the Court denies Defendant’s motion to dismiss on preemption grounds.
4
5
V.
CONCLUSION
6
For the foregoing reasons, the Court DENIES Defendant’s motion to dismiss. The Court
7
SETS an initial case management conference for July 12, 2016, at 2:00pm to discuss scheduling.
8
9
IT IS SO ORDERED.
Dated: 7/1/2016
10
United States District Court
Northern District of California
11
HAYWOOD S. GILLIAM, JR.
United States District Judge
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?