Watkins v. Consumer Adjustment Company, Inc. et al

Filing 25

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendants' Motion to Dismiss 14 is GRANTED and Plaintiff's cause of action is dismissed, without prejudice. IT IS FURTHER ORDERED that Plaintiff's Motion for Class Certification 12 is DENIED as moot. Signed by District Judge John A. Ross on 7/9/14. (JWD)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

TONY WATKINS,
Plaintiff,
v.
CONSUMER ADJUSTMENT CO., INC.,
and ROGER WEISS,
Defendants.

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No. 4:13-CV-2240 JAR

MEMORANDUM AND ORDER
This matter is before the Court on Defendants’ Motion to Dismiss. (Doc. No. 14) The
Motion is fully briefed and ready for disposition. For the following reasons, the motion will be
granted.
Background
On February 14, 2013, Plaintiff filed a lawsuit in Jefferson County, Missouri, against one
of the two defendants in this case, Consumer Adjustment Company, Inc. (“CACi”), alleging,
inter alia, that CACi violated the Telephone Consumer Protection Act, 47 USC § 227 et seq.
(“TCPA”) by calling his cellular telephone without express consent to do so. See Watkins v.
Consumer Adjustment Company, Inc., 13JE-AC00779. (Doc. No. 15-1) On March 26, 2013,
Plaintiff filed a Chapter 7 voluntary bankruptcy petition in the United States Bankruptcy Court
for the Eastern District of Missouri. See In re Watkins, Case No. 13-42571 (Bankr.E.D.Mo.)

(Doc. No. 15-2)1 Plaintiff did not list his TCPA claim against Defendants as an asset in his
bankruptcy Schedule B or otherwise indicate to either the bankruptcy court or the trustee that the
claim existed. (Id.) The Bankruptcy Court discharged Plaintiff’s debt on July 3, 2013 and prior to
doing so, appointed a trustee. (Doc. No. 15-4) On September 16, 2013, Plaintiff voluntarily
dismissed his state court action without prejudice.
On November 7, 2013, Plaintiff filed this putative class action against CACi and
Defendant Roger Weiss (“Weiss”) alleging violations of the TCPA. Plaintiff alleges that CACi, a
debt collector, violated the TCPA by using an automatic dialing system to call his cellular
telephone number more than ten times in an attempt to collect a debt. (Compl., Doc. No. 1, ¶¶ 611, 33) Plaintiff further alleges that Weiss authorized and approved CACi’s conduct. (Id., ¶ 13)
Plaintiff seeks statutory damages and injunctive relief on behalf of himself and a class consisting
of “(1) all consumers in the United States; (2) to whom Defendants placed any call using an
automatic telephone dialing system; (3) where the consumer did not expressly consent to
Defendants calling the consumer’s cellular telephone; (4) during the four year period beginning
before the filing of the original complaint and ending on the date of class certification.” (Doc.
No. 12)
Defendants move to dismiss Plaintiff’s complaint for lack of standing and judicial
estoppel. Defendants argue that only the bankruptcy trustee has standing to bring this pre-petition
cause of action, which is the property of the bankruptcy estate. In addition, Defendants argue that
Plaintiff’s action is judicially estopped because he did not disclose the alleged pre-petition TCPA
violations in his bankruptcy proceedings. (Doc. No. 15)

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The Court takes judicial notice of the records in Plaintiff’s bankruptcy case. Federal courts “may take judicial
notice of proceedings in other courts that relate directly to matters at issue.” Great Plains Trust Co. v. Union Pacific
R.R.Co., 492 F.3d 986, 996 (8th Cir. 2007).

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In response, Plaintiff states that he amended Schedule B of his bankruptcy petition on
February 26, 2014 to include his TCPA claim as an asset (Doc. No. 22-3), and that his counsel
has now been retained to represent the bankruptcy trustee. (Doc. Nos. 22-1, -2) Thus,
Defendants’ arguments concerning lack of standing and judicial estoppel are moot.
Defendants reply that while Plaintiff has made some changes to his bankruptcy petition,
the fact that his counsel has been retained to represent the estate does not cure his lack of
standing as the named plaintiff in this action, citing Davis v. Bonewicz, 2011 WL 5827796, at
*1-2 (E.D.Mo. Nov. 18, 2011) (standing defect cured with a motion to substitute the trustee of
the bankruptcy estate as the named plaintiff). Defendants further argue that because Plaintiff has
not disclosed the value of the case, he should still be judicially estopped from bringing this
action. (Doc. No. 24, pp. 2-3)
Discussion
“If the court determines at any time that it lacks subject matter jurisdiction, the court must
dismiss the action.” Fed.R.Civ.P. 12(h)(3). If a plaintiff lacks standing, the district court has no
subject matter jurisdiction. Gray v. City of Valley Park, Mo., 567 F.3d 976, 980 (8th Cir. 2009).
It is well settled that “[a]fter appointment of a trustee, a Chapter 7 debtor no longer has standing
to pursue a cause of action which existed at the time the Chapter 7 petition was filed. Only the
trustee, as representative of the estate, has the authority to prosecute and/or settle such causes of
action.” Davis, 2011 WL 5827796, at *1 (citing Harris v. St. Louis Univ., 114 B.R. 647, 648
(E.D.Mo.1990); Moratzka v. Morris (In re Senior Cottages of Am., LLC), 482 F.3d 997, 1001
(8th Cir.2007)). See also Mixon v. Anderson (In Re Ozark Rest. Equip. Co.), 816 F.2d 1222,
1225 (8th Cir.1997) (explaining that “[c]auses of action are interests in property and are
therefore included in the [bankruptcy] estate; it follows that the trustee has standing ... to assert

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causes of action that belonged to the debtor at the time of filing bankruptcy.”). In this case it is
questionable whether the bankruptcy trustee would even be a proper representative of the
proposed class. In any case, because Plaintiff's pre-petition cause of action is an interest in
property that belongs to the bankruptcy estate, see 11 U.S.C. § 541(a)(1), he lacks standing to
pursue these claims and the action will be dismissed.2 Zanders v. Armstrong Wood Products,
Inc., 2008 WL 323625, at *2 (S.D. Iowa Feb. 4, 2008). The Court need not address Defendants’
judicial estoppel argument.
Accordingly,
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss [14] is GRANTED
and Plaintiff’s cause of action is dismissed, without prejudice.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Class Certification [12] is
DENIED as moot.

Dated this _9th__ day of July, 2014.

JOHN A. ROSS
UNITED STATES DISTRICT JUDGE

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When plaintiffs themselves lack standing to maintain an action, they cannot represent others in class suits.
Mojica v. Automatic Emp. Credit Union, 363 F.Supp. 143, 146 (D.C. Ill. 1973), vacated on other grounds sub nom
Gonzalez v. Automatic Emp. Credit Union, 419 U.S. 90 (1974).

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