Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_11-cv-00622/USCOURTS-caed-1_11-cv-00622-11/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ZONE SPORTS CENTER, LLC, et al.,

Plaintiffs,

v.

BEN RODRIGUEZ,

Defendant.

_____________________________________/

Case No. 1:11-cv-00622-SKO

ORDER DENYING PLAINTIFFS'

PETITION FOR CERTIFICATION OF 

INTERLOCUTORY APPEAL

(Doc. 88)

ORDER VACATING THE AUGUST 14, 

2013, TRIAL

I. INTRODUCTION

On March 6, 2013, U.S. District Judge Lawrence J. O'Neill granted a motion for summary 

judgment, upon which judgment was entered pursuant to Federal Rule of Civil Procedure 54(b). 

(Docs. 64, 65.) On July 1, 2013, Plaintiffs filed a "Petition for Permission to file an interlocutory 

appeal." (Doc. 88.) The Court permitted all parties to file an opposition to Plaintiffs' motion. 

Having reviewed the motion and the opposition briefs, the Court finds the matter suitable for 

decision without oral argument pursuant to Local Rule 230(g). 

For the reasons stated below, the Court DENIES as MOOT Plaintiffs' petition for 

certification of an interlocutory appeal and VACATES the trial and all remaining deadlines.

II. BACKGROUND

This action was filed by Plaintiffs Fresno Rock Taco, LLC ("Rock Taco"); The Fine 

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Irishman, LLC (the "Fine Irishman"); Zone Sports Center, LLC ("Zone Sports");1minor, Claire 

Barbis through and by her guardian ad litem Heidi Barbis; Heidi Barbis; and Milton Peter Barbis. 

The complaint named defendants Ben Rodriguez; Brendan Rhames; the City of Fresno; and 

Georgeanne White and asserted claims pursuant to 42 U.S.C. § 1983. (Doc. 1.) 

A. Defendants' Motion to Dismiss the First Amended Complaint

On May 18, 2011, Plaintiffs filed a First Amended Complaint ("FAC") which omitted 

Georgeanne White as a defendant. (Doc. 9.) Subsequently, Defendants Rhames, the City of 

Fresno, and Ben Rodriguez filed motions to dismiss. (Docs. 10, 11.) Among other things, 

Defendants argued that Plaintiffs' (excluding minor Plaintiff Claire Barbis) filing for Chapter 7 

bankruptcy protection resulted in their causes of action becoming the property of their bankruptcy 

estates, and thus only the bankruptcy Trustee had standing to bring the suit on their behalf. On 

August 8, 2011, the district court issued a decision denying Defendants' motion to dismiss the 

FAC, determining that, although Plaintiffs did not inform the Bankruptcy Court of their claims by 

including them on their schedule of assets, the Trustee did have an opportunity to examine 

Plaintiffs' claims but then gave notice of his decision to abandon those claims. As such, the claims 

reverted back to Plaintiffs; because the Bankruptcy Court relied on the Trustee's decision to 

abandon the claims, judicial estoppel did not bar Plaintiffs from asserting their claims.

B. Defendants' Motion for Reconsideration 

On August 31, 2011, Defendants Rhames and the City of Fresno filed a motion for 

reconsideration asserting that Plaintiffs' counsel misled the district court into erroneously finding 

that their claims were considered by the Bankruptcy Court. In ruling on the motion for 

reconsideration, the district court held, in relevant part, as follows:

. . . Under Hamilton, Plaintiff were required to disclose the claims to their creditors 

and failed to do so. Because of this failure, they are judicially estopped from 

pursuing their claims in this court.

 

1 Collectively, Fresno Rock Taco, LLC, The Fine Irishman, LLC, and Zone Sports Center, LLC, are referred to as "the 

LLCs." 

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One issue remains. Only Milton and Heidi Barbis filed for bankruptcy. 

Defendants argue that, like Milton and Heidi Barbis, Fresno Rock Taco, LLC, Zone 

Sports Center, LLC, and the Fine Irishman, LLC (the "LLC Plaintiffs") should be 

judicially estopped from bringing the present claims in this Court. See Doc. 15 at 

5-6. The Bankruptcy Docket indicates Milton Barbis was "doing business as" all 

three LLC Plaintiffs. See 1:09-bk-60548 Docket. In addition, Plaintiffs admit that 

the Barbis' bankruptcy petition listed the three LLC Plaintiffs as assets of the estate 

with "No Cash Value." Doc. 13 at 5. Although Milton and Heidi Barbis would 

arguably be judicially estopped from asserting claims on behalf of the LLC 

Plaintiffs because the Barbis' failed to amend their own bankruptcy schedules to 

indicate that the LLC Plaintiffs possessed a potentially valuable asset (the claims in 

this case), Defendants provide no legal authority to support an extension of judicial 

estoppel to the LLC Plaintiffs themselves. According to their bankruptcy petition, 

see 1:09-bk-60548 Doc. 1 at Schedule B, Milton and Heidi Barbis control only 

25% of the stock in each of these LLCs. (Presumably, others hold the remaining 

75% interest.) The LLCs, which arguably have independent standing to bring 

Section 1983 civil rights claims, see Club Retro, LLC v. Hilton, 568 F.3d 181, 196 

(5th Cir. 2009), themselves made no representations in the bankruptcy court and 

therefore are not per se judicially estopped from bringing the claims in this case by 

virtue of Milton and Heidi Barbis' conduct. This ruling is without prejudice to a 

Federal Rule of Civil Procedure 56 challenge to the LLC's standing based on a 

more complete record.

(Doc. 35, 10:9-11:5.) In light of this discussion, the court dismissed all claims brought by Milton 

and Heidi Barbis without prejudice to refilling the claims if the failure to disclose the claims to the 

bankruptcy creditors could be cured. (Doc. 35, 11:7-10.)

C. Defendants' Motion for Summary Judgment

On January 11, 2013, Defendants City of Fresno and Rhames filed a motion for summary 

judgment asserting again that the LLCs had no standing to bring claims not disclosed to the 

bankruptcy Trustee. Defendants Fresno and Rhames argued that Milton Barbis owned 100% of 

Fresno Rock Taco and John Benjamin owned 100% of The Fine Irishman, but neither had 

disclosed the incident underlying this lawsuit as a potential claim in post-incident bankruptcy 

petitions. As such, Defendants Fresno and Rhames argued that Fresno Rock Taco and The Fine 

Irishman must be dismissed because they lacked standing to pursue these claims.

With regard to the LLCs and Defendants' assertion that they lacked standing to pursue their 

claims in this litigation, the court ruled as follows:

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Defendants contend that the LLCs are subject to dismissal under bankruptcy laws 

because the owners of the LLCs filed for bankruptcy and failed to list the instant 

lawsuit in their bankruptcy petitions.

. . .

Here, Fresno Rock Taco and The Fine Irishman are judicially estopped 

from asserting their causes of action in the instant case because the undisputed facts 

show that each is wholly owned by individuals that filed for bankruptcy and did not 

disclose the causes of action. Mr. Barbis' deposition testimony and a declaration 

prepared from a case in the Northern District [footnote omitted] provides that Mr. 

Barbis is the sole owner of Fresno Rock Taco. (Doc. 55-4, p. 3, RT p. 16; Doc. 55-

16, p. 5). Mr. Barbis filed for bankruptcy and did not disclose the causes of action 

brought by Fresno Rock Taco in the instant case to his creditors. Thus, Fresno 

Rock Taco is judicially estopped from pursuing its claims in this Court. See 

Hamilton, 270 F.3d at 783. Mr. Barbis' declaration provides that he did not own 

100% of Fresno Rock Taco, he "owned 100% of the equity capital but other 

investors owned 90% of the total capital investment." (Doc. 58-6, p. 6 ¶ 39). The 

fact that Mr. Barbis owned 100% of the equity in the company shows that he was 

the sole owner of the company.

With regard to The Fine Irishman, the company's response to the City's 

interrogatories provide that John Benjamin is the sole owner of the company. 

(Doc. 55-5, p. 3:1-6). Mr. Benjamin's bankruptcy petition also lists him as 100% 

sole owner of the company. (Doc. 55-17, p. 3). Mr. Benjamin did not disclose the 

instant claims in his bankruptcy petition nor is there any evidence to show that he 

disclosed the instant claims to his creditors. Thus, The Fine Irishman is judicially 

estopped from asserting its claims in this court. See Hamilton, 270 F.3d at 783. 

The Fine Irishman argues that the fact Mr. Benjamin did not disclose its current 

claims to Mr. Benjamin's creditors is not relevant because Mr. Benjamin filed for 

bankruptcy, not The Fine Irishman. (Doc. 58-1, p. 2). It is true that Mr. Benjamin 

filed for bankruptcy and not The Fine Irishman however, because Mr. Benjamin is 

the sole owner of the company he should have disclosed the fact that The Fine 

Irishman possessed a potentially value asset, the claims in this case. Accordingly, 

defendants' motion for summary judgment on the claims brought by Fresno Rock 

Taco and The Fine Irishman is GRANTED.

With regard to Zone Sports Center, there is a genuine dispute as to whether 

it is judicially estopped from bringing its claims. It is undisputed that Sphere 

Properties owns 89.79% of Zone Sports Center and that Granite Park Investors 

owns the other 10.21%. (Doc. 58-1, p. 3 ¶ 7, 11). It is further undisputed that Mr. 

Barbis owns 22% of Sphere Properties and failed to disclose Zone Sports Center's 

claims to his creditors when he filed for bankruptcy. It is also undisputed that Mr. 

Benjamin owns 16.6% of Granite Park Investors and Howard Young owns 12% of 

the company. It is further undisputed that both Mr. Benjamin and Mr. Young failed 

to disclose Zone Sports Center's owners failed to disclose Zone Sports Center's 

claims to their creditors when they filed for bankruptcy[,] it is unclear as to who the 

other investors are and whether they are judicially estopped from brining Zone 

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Sports Center's claims. Accordingly, Zone Sports Center is not judicially estopped 

from bringing its claims in the instant action.

(Doc. 64, 4:25-6:14.) 

On March 6, 2013, the Clerk of the Court, pursuant to Judge O'Neill's order, entered 

judgment in favor of Defendants Rhames and the City of Fresno and against Fresno Rock Taco, 

LLC; Zone Sports Center, LLC; The Fine Irishman, LLC, and minor Claire Barbis through her 

guardian ad litem, Heidi Barbis. (Doc. 65.) On July 15, 2013, Judge O'Neill issued a final 

judgment pursuant to Rule 54(b) with respect to the March 6, 2013, order.

III. DISCUSSION

A. Legal Standard

In general, appeals of district court rulings must wait until after entry of a final judgment. 

Coopers & Lybrand v. Livesay, 437 U.S. 463, 474 (1978). Nonetheless, 28 U.S.C. § 1292(b) 

provides an exception to this general rule:

When a district judge, in making in a civil action an order not otherwise appealable 

under this section, shall be of the opinion that such order involves a controlling 

question of law as to which there is substantial ground for difference of opinion and 

that an immediate appeal from the order may materially advance the ultimate 

termination of the litigation, he shall so state in writing in such order. The Court of 

Appeals . . . may thereupon . . . permit an appeal . . . if application is made to it 

within ten days . . . 

28 U.S.C. § 1292(b). Thus, a district court may certify an appeal of an interlocutory order only if 

three factors are present. First, the issue to be certified must be a "controlling question of law." 

Id. Establishing that a question of law is controlling requires a showing that the "resolution of the 

issue on appeal could materially affect the outcome of the litigation in the district court." In re 

Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982). 

Second, there must be "substantial ground for difference of opinion" on the issue. 

28 U.S.C. § 1292(b). This is not established by a party's strong disagreement with the court's 

ruling; the party seeking an appeal must make a greater showing. Mateo v. M/S Kiso, 805 F. 

Supp. 792, 800 (N.D. Cal. 1992). Third, an interlocutory appeal must be likely to materially speed 

the termination of the litigation. Whether an appeal may materially advance termination of the 

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litigation is linked to whether an issue of law is "controlling" in that the court should consider the 

effect of a reversal on the management of the case. 

As Section 1292(b) is a departure from the general rule that only final judgments are 

appealable, it "therefore must be construed narrowly." James v. Price Stern Sloan, Inc., 283 F.3d 

1064, 1068 n. 6 (9th Cir. 2002). As such, the court should apply the statute's requirements strictly, 

and should grant a motion for certification only when exceptional circumstances warrant it. 

Coopers & Lybrand, 437 U.S. at 475. The burden of establishing the existence of exceptional 

circumstances lies with the party seeking certification of an interlocutory order. Brown v. 

Oneonta, 916 F. Supp. 176, 180 (N.D.N.Y. 1996), rev'd in part on other grounds, 106 F.3d 1125 

(2d Cir. 1997).

B. The Court's March 6, 2013, Order is a Final Judgment Pursuant to Rule 54(b)

On July 15, 2013, Judge O'Neill issued a final judgment under Rule 54(b) as to the March 

6, 2013, order noting that, while the Clerk of Court had entered judgment on March 6, 2013, as 

directed, the judgment was not identified by the Court as a final judgment pursuant to Rule 54(b). 

As a final judgment now has been issued as to the March 6, 2013, order, there is no interlocutory 

order for the undersigned to certify for appeal. As a result, Plaintiffs' motion for certification of an 

interlocutory appeal of the March 6, 2013, order is DENIED as MOOT.

C. The August 14, 2013, Trial Date is VACATED to allow Plaintiffs to Pursue Review of 

the March 6, 2013, Summary Judgment Order

In response to Plaintiffs' motion for certification of an interlocutory appeal, Defendant 

Rodriguez asserts that, "in the interest of judicial economy, it would be best that any challenge to 

the Court's Order on Defendants Brendan Rhames' and the City of Fresno's Motions for Summary 

Judgment be resolved before this matter is tried." (Doc. 92, 3:21-23.) As the Court's March 6, 

2013, judgment has resulted in a final judgment with respect to the claims against Defendant 

Rhames and the City of Fresno, the order is appealable pursuant to 28 U.S.C. § 1291. The trial in 

this matter is currently set for August 14, 2013. As Plaintiffs and Defendant Rodriguez contend 

that any review of the March 6, 2013, order should be taken before the trial is conducted and 

because Plaintiffs represent that they will attempt to appeal the order, the trial and all existing 

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deadlines are VACATED. A telephonic status conference will be held in lieu of trial to determine 

whether a stay of the trial should be imposed to the extent Plaintiffs have elected to exercise their 

appellate rights.

IV. CONCLUSION

For the reasons set forth above, IT IS HEREBY ORDERD that:

1. Plaintiffs' motion to certify an interlocutory appeal is DENIED as MOOT; 

2. The August 14, 2013, trial date and all other deadlines are VACATED; and

3. A telephonic status conference is set for August 14, 2013, at 8:30 a.m.

IT IS SO ORDERED.

Dated: July 15, 2013 /s/ Sheila K. Oberto 

UNITED STATES MAGISTRATE JUDGE DEAC_Signature-END:

ie14hje

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