Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_12-cv-00899/USCOURTS-caed-1_12-cv-00899-6/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1601 Truth in Lending

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

MARSHA KILGORE, )

)

Plaintiff, )

)

)

v. )

)

)

WELLS FARGO HOME MORTGAGE, )

REGIONAL TRUSTEE SERVICES )

CORPORATION, EMMITT LEWIS )

FRED LACKER, et al., )

)

Defendants. )

____________________________________)

1:12-CV- 899 AWI SMS

ACKNOWLEDGMENT OF

BANKRUPTCY

ORDER STAYING DEFENDANT’S

MOTION TO DISMISS

ORDER TO DEMONSTRATE

STANDING

BACKGROUND

On May 14, 2012, Plaintiff filed a complaint for damages in the Superior Court for the

State of California, County of Fresno. The complaint concerns a loan and deed of trust against

property located at 728 East Magill Avenue, Fresno, California 93710 (“the Property). Because

the complaint appeared to raise federal causes of action, on May 31, 2012, Defendant Wells

Fargo Home Mortgage (“Defendant Wells Fargo”) removed this action to this Court. 

On June 14, 2012, Defendant Wells Fargo filed a motion to dismiss the complaint. On

July 31, 2012, the Court granted Defendant Wells Fargo’s motion to dismiss and dismissed the

complaint with leave to amend. 

Case 1:12-cv-00899-AWI-JDP Document 50 Filed 01/07/13 Page 1 of 4
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On August 31, 2012, Plaintiff filed a second amended complaint. Defendant Wells

Fargo then moved to dismiss the second amended complaint.

On December 12, 2012 and January 2, 2013, Plaintiff filed notices with the Court that she

had filed for bankruptcy protection. A review of Plaintiff’s notices show no indication that the

assigned Bankruptcy Trustee has authorized Plaintiff to continue in this legal action or that the

Trustee has abandoned this action.

DISCUSSION

Preliminary, the court notes that the automatic bankruptcy stay applies only to actions

“brought against the debtor.” 11 U.S.C. § 362(a) (emphasis added). Because Plaintiff, as the

debtor, has filed for bankruptcy, the automatic stay provision does not apply. See Snavely v.

Miller, 397 F.3d 726, 729 (9 Cir. 2005); Ingersoll–Rand Financial Corp. v. Miller Mining Co., th

817 F.2d 1424, 1426 (9 Cir. 1987). th

However, once a party files for bankruptcy, a bankruptcy estate is created and that estate

includes “all legal or equitable interests of the debtor in property as of the commencement of the

case.” 11 U.S.C. § 541(a)(1). This includes any pending actions of the debtor. See Walton v.

Allstate Ins. Co., 222 Fed.Appx. 544, 544-455 (9 Cir. 2007); In re Eisen, 31 F.3d 1447, 1451 n. th

2 (9 Cir.1994); Sierra Switchboard Co. v. Westinghouse Electric Corp., 789 F.2d 705, 707-09 th

(9 Cir. 1986); Just Film, Inc. v. Merchant Services, Inc., 873 F.Supp.2d 1171, 1176 (N.D.Cal. th

2012); Alexander v. Chakmakian, NO. CV 06-8257 JVS JEM, 2012 WL 1319772, at *2 n.1

(C.D.Cal. 2012); Garcia v. Federal Home Loan Mortg. Corp., NO. 1:12-CV-00397 AWI BAM,

2012 WL 3756307, at *1 n.1 (E.D.Cal. 2012); Fresno Rock Taco LLC v. Rodriguez, NO.

1:11–CV–00622 LJO SKO, 2011 WL 5240444, at *2 (E.D.Cal. 2011). When a plaintiff

declares bankruptcy, all the plaintiff’s legal or equitable interests in any cause of action become

the bankruptcy estate’s property and the bankruptcy trustee represents any pending lawsuit or

action; The plaintiff lacks standing to pursue the lawsuit or action. Turner v. Cook, 362 F.3d

1219, 1225-26 (9 Cir. 2004); see, also, e.g., Just Film, Inc., 873 F.Supp.2d at 1176 (bankruptcy

th

petitioner loses standing for any cause of action and estate becomes only real party in interest);

Young v. U.S. Bank Nat. Ass'n, NO. SACV 12-0662 (MLGx), 2012 WL 3678631, at *3-4

2

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(C.D.Cal. 2012) (holding plaintiff lacked standing because plaintiff’s bankruptcy filing deprived

him of ability to bring any lawsuit unless he could show claims were exempt or trustee

abandoned claims); Runaj v. Wells Fargo Bank, 667 F.Supp.2d 1199, 1206 (S.D.Cal. 2009)

(holding that plaintiff’s legal causes of action are “the property of her bankruptcy estate.”).1

This action’s claims accrued prior to Plaintiff filing for bankruptcy. As such, upon

Plaintiff’s filing for bankruptcy, Plaintiff is no longer the real party in interest in this lawsuit, and

she lacks standing to pursue this lawsuit. In light of Plaintiff filing for bankruptcy, the Court

finds that it is appropriate to stay all pending proceedings. The Court will order Plaintiff or the

Bankruptcy Trustee to show that, the Bankruptcy Trustee will substitute or ratify this lawsuit

pursuant to Federal Rule of Civil Procedure 17(a)(3); this lawsuit is exempt from the bankruptcy

estate; or this lawsuit has been abandoned by the Trustee. See, e.g., Young, 2012 WL 3678631,

at *3-4 (finding that a debtor “may not prosecute a cause of action belonging to the bankruptcy

estate absent showing her claims were exempt from estate or abandoned by the bankruptcy

trustee.”); Coward v. JP Morgan Chase Bank, Nat. Ass'n, NO. 2:11-CV-03378 GEB DAD, 2012

WL 2263359, at *2 (E.D.Cal. 2012) (same); Rowland v. Novus Financial Corp. 949 F.Supp.

1447, 1453 (D. Hawai‘I 1996) (same). If Plaintiff is unable to make an appropriate showing or

the Bankruptcy Trustee fails to substitute into this action, this action will be dismissed due to

Plaintiff’s lack of standing.

Accordingly, IT IS HEREBY ORDERED that:

1. This action and all pending motions are HEREBY STAYED.

2. The January 15, 2013 scheduling conference is VACATED.

3. No later than 4:00 p.m. on February 1, 2013, Plaintiff and/or the Bankruptcy

Trustee shall file either:

a. A notice with the Court of the Bankruptcy Trustee’s ratification, joinder,

or substitution into this action pursuant to Federal Rule of Civil Procedure

 A debtor must disclose any litigation likely to arise to the bankruptcy trustee so that it 1

may become a part of the bankruptcy estate. Failure to do so may result in the debtor being

estopped from litigating the claim in a non-bankruptcy forum. Hay v. First Interstate Bank

ofKalispell, N.A., 978 F.2d 555, 557 (9 Cir. 1992). th

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17(a); or

b. A memorandum, supported by appropriate evidence, that demonstrates this

action is either exempt or abandoned by the Bankruptcy Trustee.

4. All concerned parties are warned that the failure to abide by the deadline set in

this order will result in dismissal of this action without further notice.

IT IS SO ORDERED. 

Dated: January 4, 2013 

0m8i78 UNITED STATES DISTRICT JUDGE

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