Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_11-cv-00622/USCOURTS-caed-1_11-cv-00622-3/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

FOR THE EASTERN DISTRICT OF CALIFORNIA

FRESNO ROCK TACO LLC, et al.,

 Plaintiffs, 

 v. 

BEN RODRIGUEZ, et al.,

 Defendants.

1:11-cv-00622 LJO SKO

MEMORANDUM DECISION AND 

ORDER RE DEFENDANTS’ MOTION 

FOR RECONSIDERATION (DOCS. 18 

& 24)

I. INTRODUCTION

Plaintiffs Fresno Rock Taco, LLC, Zone Sports Center, LLC, The Fine Irishman, LLC,

Milton Barbis, Heidi Barbis, and Heidi Barbis as guardian ad litem for Claire Barbis bring this 

civil rights action pursuant to 42 U.S.C. § 1983. Plaintiffs assert various Fourth and Fourteenth 

Amendment claims against Ben Rodriguez, a California Department of Insurance employee, 

Fresno Police Department Detective Brandon Rhames, and the City of Fresno arising out of the 

search of their businesses and home. First Amended Complaint (“FAC”), Doc. 9. 

An August 8, 2011 Memorandum Decision denied Defendants’ motion to dismiss the 

FAC. Doc. 17 (“8/8/11 Decision”). Among other things, Defendants argued that Plaintiffs’, 

excluding Claire Barbis, filing for Chapter 7 bankruptcy protection resulted in their causes of 

action becoming property of their bankruptcy estates, meaning that only the bankruptcy Trustee 

has standing to bring this suit on their behalves. The district court determined 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 them. As such, the claims reverted back to Plaintiffs. Id. at 5-10. 

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Moreover, because the Bankruptcy Court relied on the Trustee’s decision to abandon the claims, 

rather than Plaintiffs’ initial assertion that no such claims existed, judicial estoppel did not bar

Plaintiffs from asserting their claims. Id. at 11.

Defendants now move for reconsideration of this ruling, arguing that Plaintiffs’ counsel 

misled the district court into erroneously believing the instant claims had been considered by the 

Bankruptcy Court. Doc. 24.1 The motion was originally calendared for November 3, 2011, but 

the hearing was vacated and the matter was taken under submission on the papers.

II. PREVIOUS RULING

The starting point for analysis of Defendants’ motion for reconsideration is the relevant 

reasoning from the 8/8/11 Decision:

... Defendants contend that Plaintiffs’, excluding Claire Barbis, filing for Chapter 7 

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

estate. Defendants argue only the bankruptcy Trustee has standing to bring this suit.

Plaintiffs counter that the bankruptcy Trustee has examined these claims and has 

determined, for bankruptcy estate purposes, they have no value and has abandoned them, 

resulting in the claims re-vesting to the Plaintiffs. Plaintiffs also argue that they were not 

aware of their potential claims until after they filed bankruptcy petitions. Additionally, 

Plaintiffs claim that even if this were not the case, Claire Barbis would still have standing 

to bring her claims as she never filed for bankruptcy. Finally, Plaintiffs contest that 

although Milton and Claire Barbis stated that they were referred to as the Plaintiff LLCs in 

their bankruptcy petition, the Plaintiff LLCs never declared bankruptcy and still have 

standing to bring their claims. 

“An ‘estate’ is created when a bankruptcy petition is filed.” Cusano v. Klein, 264 F.3d 

936 (9th Cir. 2001); 11 U.S.C. § 541(a). The property of the bankruptcy estate includes 

causes of action that accrue before the claimant declares bankruptcy. Sierra Switchboard 

co. v. Westinghouse Electric Corp., 789 F.2d 705, 707-709 (9th Cir. 1986). A § 1983 

cause of action accrues at the time that, “the plaintiff knows or has reason to know of the 

injury which is the basis of the action.” Maldonado v. Harris, 370 F.3d 945, 954 (9th Cir. 

2004). A Chapter 7 debtor may only bring a cause of action if the debtor can show either 

1) the action was not subject to the bankruptcy or 2) was abandoned by the bankruptcy 

trustee. Otherwise the claim belongs to the bankruptcy estate and only the Trustee has 

standing to litigate the cause of action. Rowland v. Novus Financial Corp., 949 F.

Supp. 1447, 1453 (9th Cir. 1996).

 1 The request for reconsideration was initially filed as an ex parte application, Doc. 18, which Plaintiffs opposed, 

Doc. 19. Defendants replied. Doc. 20. Defendants’ ex parte application was then designated and calendared as an 

ordinary civil motion. Doc. 22. Defendants re-filed and re-noticed an identical motion. Doc. 24. The original 

opposition and reply to the ex parte application are here considered to be the opposition and reply to the re-noticed 

motion. 

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A debtor must disclose any litigation likely to arise to the bankruptcy Trustee so that it 

may become a part of the bankruptcy estate. Failure to do so, or asserting a lack of any 

claim, may result in the debtor being judicially estopped from litigating the claim in a 

non-bankruptcy forum. Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 

(9th Cir. 1992). However, the Ninth Circuit only recognizes judicial estoppel when the 

Bankruptcy Court relied on the assertion that the debtor did not intend to bring any 

litigation, and the litigation would result in a windfall to the debtor against her creditors. 

Donato v. Metropolitan Life Insurance Co., 230 B.R. 418, 421 (N.D. Cal. 1999) (citing 

Milgard Tempering, Inc. v. Selas Corp. of America, 902 F.2d 703, 715 (9th Cir. 1990)).

In Cusano v. Klein, 264 F.3d 936, 945 (9th Cir. 2001) the plaintiff sought to bring an 

action for unpaid royalties. However, the plaintiff had previously filed for bankruptcy and 

had not informed the Court in the bankruptcy proceedings of this cause of action, which 

had accrued prior to filing his petition for bankruptcy. Id. at 948. By the time of his suit 

for unpaid royalties, plaintiff’s bankruptcy proceedings had been closed without the cause 

of action having been examined or administered for the benefit of any of the plaintiff’s 

debts. Id. Normally this would result in the unadministered asset (the claim) being

technically abandoned and reverting back to the plaintiff-debtor. Id. at 945. However, 

because the bankruptcy estate did not have the opportunity to examine the claim, the asset 

(claim) continues to belong to the bankruptcy estate and does not revert to the plaintiffdebtor. Id. at 946. The plaintiff had no standing to bring that particular claim.

Defendants contend that the actions alleged in the FAC should have put Plaintiffs on 

notice of their claims well before their bankruptcy petition, and that those claims accrued 

before the filing of the bankruptcy petition, as in Cusano. Also like Cusano ̧ the Plaintiffs 

bankruptcy estate closed prior to the filing of their complaint. Defendants argue that, like 

the plaintiff’s claim in Cusano, the Plaintiffs’ cause of action here was not technically 

abandoned and did not revert back to them, but, rather, still belongs to the bankruptcy 

estate, making the Trustee the only person with standing to bring any claims. 

Furthermore, because Plaintiffs never listed their potential claims on their bankruptcy 

petition nor informed the Trustee of the potential litigation, Defendant City of Fresno 

contends that Plaintiffs should be judicially estopped from bringing their claims outside of 

a bankruptcy forum. See Hay 978 F.2d 555, 557 (holding that a debtor’s failure to inform 

the bankruptcy estate of potential causes of actions precluded him from bringing those 

claims against a former creditor outside of a bankruptcy proceeding).

Plaintiffs oppose the Defendants’ position. Plaintiffs contend that the bankruptcy estate 

does not own their action. To prove this, Plaintiffs must show that the cause of action is 

either exempt from the bankruptcy proceedings, or was abandoned by the Trustee. 

Rowland, 949 F. Supp. 1447, 1453. Plaintiffs do not contend that the cause of action was 

exempt, but rather, they claim that it was abandoned by the Trustee. Plaintiffs point to the 

“United State Trustee’s Ex Parte Motion to Reopen Case” (Doc. 12-2), dated October 20, 

2010, which asks the Bankruptcy Judge to reopen the Plaintiffs’ bankruptcy case after 

having learned of this lawsuit and another pending in the Northern District of California. 

The case was reopened by U.S. Bankruptcy Judge W. Richard Lee on October 21, 2010 

(Doc. 12-3). However, after examining the claim, the U.S Trustee found, in his “Notice of 

Filing Report of No Distribution” (“Notice”), filed April 16, 2011 (Doc. 12-4) that there 

were no funds to distribute and that the estate had been fully administered. The Notice 

also provided an objection period for interested parties to request a hearing. No objection 

was filed and no hearing was held. Plaintiffs argue that this Notice abandoned the claims 

to the Plaintiffs.

11 U.S.C.A. § 554 governs the abandonment of estate property. Section 554 states:

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[(a)] After notice and a hearing, the trustee may abandon any property of the estate 

that is burdensome to the estate or that is of inconsequential value and benefit to 

the estate.

[(b)] On request of a party in interest and after notice and a hearing, the court may 

order the trustee to abandon any property of the estate that is burdensome to the 

estate or that is of inconsequential value and benefit to the estate.

[(c)] Unless the court orders otherwise, any property scheduled under section 

521(a)(1) of this title not otherwise administered at the time of the closing of a 

case is abandoned to the debtor and administered for purposes of section 350 of 

this title.

[(d)] Unless the court orders otherwise, property of the estate that is not abandoned 

under this section and that is not administered in the case remains property of the 

estate.

11 U.S.C.A. § 554. “There is no abandonment without notice to creditors.” Sierra 

Switchboard Co. v. Westinghouse Electric Co., 789 F.2d 705, 709. It is uncontested that 

Section 554(c) above does not apply since Plaintiffs did not list their cause of action in the 

bankruptcy schedules. 

Plaintiffs do cite a Notice which declares the claims to have no value and to be of no 

interest to the bankruptcy estate. The Notice also provided a period during which 

objections could have been filed and a hearing could have been held. No such objections 

were filed. This Notice, coupled with the lack of objections, adequately served as notice 

and hearing, under Section 554(a), of the Trustee’s abandonment of Plaintiff’s claims. 

See In re Tucci, 47 B.R. 328, 331 (Bankr. E.D.Va. 1985) (holding that a hearing is only 

required if an objection to the proposed abandonment is filed), cited with approval in 

Sierra Switchboard Co. v. Westinghouse Electric Co., 789 F.2d 705, 709.

Unlike Cusano, the Trustee here had the opportunity to examine the Plaintiffs’ claims. 

The Trustee then gave notice of his decision to abandon the claims. As such, Plaintiffs’

claims did revert back to them. Plaintiffs have standing to bring this suit. Judicial 

estoppel is not here appropriate because the Bankruptcy Court relied on the Trustee’s 

decision to abandon the claims, not the Plaintiffs’ initial assertion that there were no 

claims. 

There is no need to discuss Plaintiffs’ other arguments that they lacked awareness of the 

existence of their claims or that neither the LLCs nor Claire Barbis filed for bankruptcy.

Defendants’ motions to dismiss all claims of all Plaintiffs are DENIED.

8/8/11 Decision at 5-10.

III. STANDARD OF DECISION

Pursuant to Federal Rule of Civil Procedure 60(b) “[o]n motion and just terms, the court 

may relieve a party ... from a final judgment, order, or proceeding for the following reasons: (1) 

mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence ...; (3) 

fraud..., misrepresentation, or misconduct by an opposing party; ... or (6) any other reason that 

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justifies relief.” Where none of these factors is present, the motion is properly denied. See Fuller 

v. M.G. Jewelry, 950 F.2d 1437, 1442 (9th Cir. 1991). “A motion for reconsideration should not 

be granted, absent highly unusual circumstances, unless the district court is presented with newly 

discovered evidence, committed clear error, or if there is an intervening change in the controlling 

law,” and it “may not be used to raise arguments or present evidence for the first time when they 

could reasonably have been raised earlier in the litigation.” Marlyn Nutraceuticals, Inc. v. Mucos 

Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (internal quotations marks and citations

omitted).

2

IV. DISCUSSION

Defendants’ motion for reconsideration invokes Rule 60(b)(3), arguing that the district 

court was “misled by Plaintiffs’ counsel” as to certain documents presented at oral argument on 

the motion to dismiss. The following documents are relevant:

(1) An October 12, 2010 letter from Plaintiffs Milton and Heidi Barbis’ bankruptcy 

attorney, Mr. Armstrong, to Plaintiffs’ counsel in this matter, Mr. Hamlish. In the letter, Mr. 

Armstrong contends that a “$500 million” lawsuit filed in the Eastern District of California (Zone 

Sports Center Inc. LLC, et al. v. Red Head, Inc., et al., 1:10-cv-01833 AWI SMS) by Mr. 

Hamlish on Plaintiffs’ behalf “is property of the bankruptcy estate.” Doc. 12-6. That lawsuit, 

which was transferred to the Northern District of California in February 2011, raises breach of 

contract claims and alleges that several private entities and individuals engaged in anticompetitive behavior. See Zone Sports, 1:10-cv-01833 AWI SMS, Docs. 1 & 40.

3

 

 2 Motions for reconsideration are also subject to Local Rule 230(j), which requires, among other things, that movant 

set forth: “[W]hat new or different facts or circumstances are claimed to exist which did not exist or were not shown 

upon such prior motion, or what other grounds exist for the motion” and “why the facts or circumstances were not 

shown at the time of the prior motion.” 

3 The Court takes judicial notice of these documents, even though they were not provided by any party. See

Trigueros v. Adams, --- F.3d ---, 2011 WL 4060503 (9th Cir. Sept. 14, 2011) (court “may take notice of proceedings 

in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to 

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(2) An October 20, 2010 ex parte motion to reopen the bankruptcy case filed by the 

United States Trustee. Doc. 12-2. This motion indicates that Debtors failed to disclose in their 

bankruptcy schedules “Milton Peter Barbis’ interest, as a Plaintiff, in a multi-million [dollar] 

lawsuit pending in the United States District Court, Eastern District of California.” The U.S. 

Trustee requested that the case be reopened and that a trustee be appointed. Doc. 12-2 at 2. The 

ex parte motion was granted on October 21, 2010. Doc. 12-3. 

(3) An April 6, 2011 Notice of Filing Report of No Distribution, which gives all debtors 

notice that Trustee has fully administered the estate. Doc. 12-4. The attached Chapter 7 

Trustee’s Report of No Distribution makes no specific mention of any lawsuit and certifies that 

the estate has been fully administered. See Doc. 13-4. 

These documents were presented in Plaintiffs’ opposition to the motion to dismiss, see

Doc. 12 - 12-6 & 13 - 13-6, and discussed at the August 1, 2011 hearing on that motion, Doc. 23 

(Hg. Tr.). Defendant fails to specifically explain how Plaintiff “misled” the court in any way 

about the content of these documents. Defendants latch onto the following language contained in 

a footnote to Plaintiffs’ opposition to this motion to reconsider: 

In reviewing the Court's Memorandum Decision dated August 9, 2011, at page 9:19-25, it 

appears that there was some confusion and the Court may be under the wrong impression

as to the purpose of the Armstrong letter of October 12, 2010 and the October 20, 2010 

Motion to Reopen. Both the Armstrong letter and that Motion to Reopen only concerned 

an action filed in the U.S. District Court for the Eastern District which was later removed 

to the U.S. District Court for the Northern District. The instant claim was not discovered 

until January 11, 2011 and therefore could not have been the subject of the October 12 

letter or the October 20 motion. Hamlish notified the Trustee of this claim on or about 

January 14, 2011 and the Complaint filed April 16, 2011, the same date as the Notice of 

No Distribution.

Doc. 19 at 2-3, n.1. Defendants assert in Reply that this “wrong impression” was “caused by 

Plaintiffs’ misrepresentations” and “leave[s] the issue of sanctions and costs under Rule 11 ... to 

the sound discretion of the Court.” Doc. 20. Yet, Defendants nowhere demonstrate that the 

 

matters at issue”).

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source of this “wrong impression” was anything other than innocent confusion, let alone that the 

prerequisites for the issuance of sanctions under Federal Rule of Civil Procedure 11 have been 

satisfied. Defendants have entirely failed to demonstrate that reconsideration is warranted under 

Federal Rule of Civil Procedure 60(b)(3), which applies only to instances of “fraud..., 

misrepresentation, or misconduct by an opposing party.”

Alternatively, Rule 60(b)(1) permits relief from an order where there has been “mistake, 

inadvertence, surprise, or excusable neglect.” In addition to this authority, a district court has 

independent (common law) power to correct its own mistakes so long as its jurisdiction continues. 

See City of Los Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 886-87 (9th Cir. 

2001). The question then becomes, was a mistake made?

Chronologically, the first document discussed in the 8/8/11 Decision was the U.S. 

Trustee’s 10/20/11 request to re-open the bankruptcy case based on a “multi-million [dollar] 

lawsuit pending in the United States District Court, Eastern District of California.” Based on this 

document alone, the 8/8/11 Decision concluded that the U.S. Trustee “learned of this lawsuit.”

8/8/11 Decision at 9. The 8/8/11 Decision does not acknowledge the content of the 10/12/10 

letter from Armstrong to Hamlish, which discusses only the Zone Sports Center case, not the 

instant matter. When read together, the possibility arises that the 10/20/11 motion to re-open was, 

in fact, referring only to the Zone Sports Center case. Mr. Hamlish has submitted a declaration 

stating that between 10/12/11 and 10/20/11, he had independent communications with the Trustee 

about the claims in this case. See Doc. 19 at 5, 14.4 Although Mr. Hamlish submits no 

documents to support his declaration, his first-person recollection of information he shared with 

the Trustee is not hearsay. 

Even if, arguendo, the “multi-million dollar” lawsuit referenced in the 10/20/11 motion to 

 4 Mr. Hamlish’s Declaration, which is appended to the end of Plaintiff’s opposition, “incorporates by reference” the 

entire content of his Memorandum of Points and Authorities, including a factual statement. See Doc. 19 at 14. 

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reopen included this lawsuit, it is undisputed that the motion to reopen was not served on all the 

creditors. In fact, Mr. Hamlish contended in a motion before the bankruptcy court that the motion 

to re-open was not even served on him. See In re Milton Peter Barbis and Heidi Elizabeth 

Barbis, 1:09-bk-60548-B-7F, Doc. 48 (filed Oct. 28, 2010).5 A claim cannot be abandoned 

absent notice to creditors. Sierra Switchboard Co. v Westinghouse Elec. Corp., 798 F.2d 705, 

709 (9th Cir. 1986). The only “Notice” sent to creditors was a generic form indicating the 

Trustee’s intent to abandon all assets of the estate along with a paragraph-long “Report” that 

makes no specific mention of any lawsuit. Therefore, the 8/8/11 memorandum decision was 

mistaken in concluding that the claim was properly abandoned. No notice of intent to abandon 

the instant lawsuit was ever provided to creditors under 11 U.S.C. § 554(b) and no other 

document in the record indicates that creditors were informed in any way of the existence of the 

asset (i.e. this lawsuit). 

“In the bankruptcy context, a party is judicially estopped from asserting a cause of action 

not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure 

statements.” Hamilton v. State Farm Fire & Cas. Co. 270 F.3d 778, 783 (9th Cir. 2001) (citing 

Hay v. First Interstate Bank of Kalispell, N.A., 978 F.2d 555, 557 (9th Cir.1992) (failure to give 

notice of a potential cause of action in bankruptcy schedules and Disclosure Statements estops the 

debtor from prosecuting that cause of action)). Here, assuming the truth of Mr. Hamlish’s 

assertions, Mr. Hamlish did inform the Trustee of this lawsuit, and the Trustee in turn informed 

the Bankruptcy Court of the asset when he moved to reopen the bankruptcy case. Does estoppel 

nevertheless apply because the creditors were not properly informed of the existence of the asset? 

In Hamilton, the plaintiff/debtor was deemed to have “clearly asserted inconsistent 

positions,” because he “failed to list his claims ... as assets on his bankruptcy schedules.” Id. at 

 5 The bankruptcy docket contains public documents that are the appropriate subject of judicial notice. See supra, 

note 3 (citing Trigueros v. Adams, --- F.3d ---, 2011 WL 4060503).

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784. The Ninth Circuit rejected plaintiff’s argument that he had informed the trustee of his 

pending claims against defendant:

...[N]otifying the trustee by mail or otherwise is insufficient to escape judicial estoppel. 11 

U.S.C. § 521(1) provides that, “[t]he debtor shall file a list of creditors, and unless the 

court orders otherwise, a schedule of assets and liabilities, a schedule of current income 

and current expenditures, and a statement of the debtor's financial affairs.” 

[Plaintiff/debtor] is required to have amended his disclosure statements and schedules to 

provide the requisite notice, because of the express duties of disclosure imposed on him 

by 11 U.S.C. 521(1), and because both the court and Hamilton's creditors base their 

actions on the disclosure statements and schedules. In re Coastal Plains, 179 F.3d at 206

Id. The Ninth Circuit’s additional reasoning is relevant:

In this case, we must invoke judicial estoppel to protect the integrity of the bankruptcy 

process. The debtor, once he institutes the bankruptcy process, disrupts the flow of 

commerce and obtains a stay and the benefits derived by listing all his assets. The 

Bankruptcy Code and Rules “impose upon the bankruptcy debtors an express, affirmative 

duty to disclose all assets, including contingent and unliquidated claims.” In re Coastal 

Plains, 179 F.3d at 207-208; Hay, 978 F.2d at 557; 11 U.S.C. § 521(1). 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. In re Coastal Plains, 179 

F.3d at 208; Youngblood Group v. Lufkin Fed. Sav. & Loan Ass'n, 932 F.Supp. at 867; 

Fed. R. Bankr.P. 1009(a) (schedules may be amended as a matter of course before the case 

is closed). Hamilton's failure to list his claims against State Farm as assets on his 

bankruptcy schedules deceived the bankruptcy court and Hamilton's creditors, who relied 

on the schedules to determine what action, if any, they would take in the matter....

We agree with the Fifth Circuit's analysis in In re Coastal Plains when it said, “[I]t is very 

important that a debtor's bankruptcy schedules and statement of affairs be as accurate as 

possible, because that is the initial information upon which all creditors rely.” Id. The 

Coastal court further defined the essence of judicial estoppel in this bankruptcy context:

The rationale for ... decisions [invoking judicial estoppel to prevent a party who 

failed to disclose a claim in bankruptcy proceedings from asserting that claim after 

emerging from bankruptcy] is that the integrity of the bankruptcy system depends 

on full and honest disclosure by debtors of all of their assets. The courts will not 

permit a debtor to obtain relief from the bankruptcy court by representing that no 

claims exist and then subsequently to assert those claims for his own benefit in a 

separate proceeding. The interests of both the creditors, who plan their actions in 

the bankruptcy proceeding on the basis of information supplied in the disclosure 

statements, and the bankruptcy court, which must decide whether to approve the 

plan of reorganization on the same basis, are impaired when the disclosure 

provided by the debtor is incomplete. 

Id. at 785. 

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Although Plaintiffs reference Hamilton in their opposition to this motion for 

reconsideration, they fail to distinguish or even acknowledge this critical language. Plaintiffs 

appear to cite Hamilton and several other cases for the proposition that if a debtor had no 

information that would lead him to believe he had a claim, disclosure to the Bankruptcy Court is 

not required. Doc. 19 at 8. Plaintiffs assert that they did not learn of facts that would support 

their claims in this lawsuit until January 11, 2011. Id. at 9. Yet, Plaintiffs readily admit that they 

did possess knowledge of facts to support their claims after January 11, 2011. They contend Mr. 

Hamlish informed the Trustee of their claims. Under Hamilton, Plaintiffs 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. 

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 estoppels 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 

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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 LLCs’ standing based 

on a more complete record.

Defendants’ motion for reconsideration is GRANTED IN PART AND DENIED IN 

PART. All claims brought by Milton and Heidi Barbis are DISMISSED WITHOUT 

PREJUDICE to their re-filing if the failure to disclose to the bankruptcy creditors can be cured.6

The motion is DENIED as to all other claims brought by all other plaintiffs. 

V. CONCLUSION AND ORDER

For the reasons set forth above, Defendants’ Motion for Reconsideration is GRANTED IN 

PART AND DENIED IN PART.

(1) All claims brought by Milton and Heidi Barbis are DISMISSED WITHOUT 

PREJUDICE. 

(2) The motion for reconsideration is DENIED as to all other claims brought by all other 

Plaintiffs. 

SO ORDERED

Dated: November 1, 2011

 /s/ Lawrence J. O’Neill

United States District Judge

 6 The Court expresses no opinion as to whether a cure is legally or procedurally possible. 

Case 1:11-cv-00622-SKO Document 35 Filed 11/01/11 Page 11 of 11