Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_15-cv-02433/USCOURTS-caed-2_15-cv-02433-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331(a) Fed. Question: Real Property

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CAROLYN B. TALOSIG AND DARWIN 

A. TALOSIG,

Plaintiffs,

v.

US BANK N.A.; CALIBER HOME 

LOANS, INC.; et al.,

Defendants.

No. 2:15-cv-2433-MCE-CKD

MEMORANDUM AND ORDER

Plaintiffs Carolyn Talosig and Darwin Talosig (“Plaintiffs”) allege that Defendants 

US Bank, N.A., Caliber Home Loans, et al. (collectively “Defendants”) wrongfully 

foreclosed on Plaintiffs’ home. Presently before the Court is Defendant’s Motion to 

Dismiss.1 ECF No. 5. In addition to their timely opposition and reply, both parties filed 

supplemental briefs addressing the issue of judicial estoppel at the Court’s request. ECF 

Nos. 16 and 18. For the reasons that follow, Defendant’s Motion is GRANTED.

///

///

///

 1 Because oral argument would not have been of material assistance, the Court ordered this 

matter submitted on the briefs. E.D. Cal. Local Rule 230(g). ECF No. 15.

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BACKGROUND2

Plaintiffs are former homeowners and mortgagors. In February 2007, Plaintiffs 

purchased a home at 2248 Katherine Place in Manteca, CA, with a promissory note for 

$572,183.15, secured by a deed of trust (the “mortgage”). In September 2013, a Notice 

of Default was recorded on the mortgage. ECF No. 6, Ex. A. In July 2014, U.S. Bank 

recorded a Notice of Trustee Sale against the home. According to Plaintiffs, HSBC 

serviced the mortgage until transferring servicing duties to Caliber Home Loans 

“sometime in the fourth quarter of 2014.” Plaintiffs allege that they never received the 

required notice of this servicing transfer. By October 2014, Plaintiffs were “severely in 

arrears” on their mortgage. Between October 2014 and January 27, 2015, Plaintiffs 

allege they were unable to discover who serviced the mortgage. During the same 

period, Plaintiffs’ representative succeeded in postponing the foreclosure sale several 

times. On January 21, 2015, the trustee sale agent allegedly told Plaintiffs’ 

representative that the foreclosure sale would be postponed until mid-February 2015. 

In spite of this representation, the trustee sale agent conducted the foreclosure sale on 

January 27, 2015. Plaintiff Carolyn Talosig filed bankruptcy that same day but failed to 

stop the sale. On February 11, 2015, Carolyn submitted a bankruptcy schedule listing 

Caliber Home Loans as a secured creditor. ECF No. 6, Ex. E. The schedule did not list 

any contingent claims as assets. Id. On May 21, 2015, Carolyn was granted a 

discharge in bankruptcy. ECF No. 6, Ex. C. On June 23, 2015, the bankruptcy case 

was closed. Id. 

After the bankruptcy concluded, Plaintiffs filed the operative Complaint in this 

action, alleging three causes of action. ECF No. 1. Plaintiffs’ claims include: 

 2 This statement of facts is based on allegations in Plaintiffs’ Complaint (ECF No. 1) and on 

judicially noticed facts which the Court may properly consider under Federal Rule of Evidence 201(b). 

Defendants requested that the Court take judicial notice of documents filed in course of the foreclosure 

and bankruptcy proceedings. ECF No. 6. That request is unopposed and is granted. The court takes 

judicial notice of: “Notice of Default” (ECF No. 6, Ex. A); “CM/ECF Docket 15-20550” (ECF No. 6, Ex. C); 

and “Summary of Schedules” (ECF No. 6, Ex. E). 

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(1) negligent servicing of the mortgage loan; (2) promissory estoppel (seeking damages); 

and (3) seeking to quiet title in the Plaintiffs. 

Defendants seek dismissal under Rule 12(b)(6) for lack of standing, failure to 

allege tender, and inadequate pleadings. ECF No. 5. Defendants filed a Request for 

Judicial Notice in support of the Motion to Dismiss. ECF No. 6. At the Court’s request, 

the parties also filed supplemental briefs addressing whether the doctrine of judicial 

estoppel bars Plaintiffs’ claims. 

STANDARD

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all 

allegations of material fact must be accepted as true and construed in the light most 

favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,337-38 

(9th Cir. 1996). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not 

require detailed factual allegations. However, “a plaintiff’s obligation to provide the 

grounds of his entitlement to relief requires more than labels and conclusions, and a 

formulaic recitation of the elements of a cause of action will not do.” Id. (internal citations 

and quotations omitted). A court is not required to accept as true a “legal conclusion 

couched as a factual allegation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) 

(quoting Twombly, 550 U.S. at 555). “Factual allegations must be enough to raise a 

right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citing 5 Charles 

Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) 

(stating that the pleading must contain something more than “a statement of facts that 

merely creates a suspicion [of] a legally cognizable right of action.”)). 

When evaluating the adequacy of a complaint, the court may consider exhibits 

submitted with the complaint or those subject to judicial notice, without converting a 

motion to dismiss into a motion for summary judgment. Lee v. City of Los Angeles, 

///

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250 F.3d 668, 689 (9th Cir. 2001). A court may take judicial notice of “matters of public 

record.” Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). 

A court granting a motion to dismiss a complaint must then decide whether to 

grant leave to amend. Leave to amend should be “freely given” where there is no 

“undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice 

to the opposing party by virtue of allowance of the amendment, [or] futility of the 

amendment . . . .” Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. 

Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to 

be considered when deciding whether to grant leave to amend). Not all of these factors 

merit equal weight. Rather, “the consideration of prejudice to the opposing party . . . 

carries the greatest weight.” Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 

185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that 

“the complaint could not be saved by any amendment.” Intri-Plex Techs. v. Crest Group, 

Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 

1013 (9th Cir. 2005); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 

1989) (“Leave need not be granted where the amendment of the complaint . . . 

constitutes an exercise in futility . . . .”)).

ANALYSIS

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

action not . . . mentioned in the debtor’s schedules or disclosure statements.” Hamilton 

v. State Farm Fire & Cas. Co., 270 F.3d 778, 782-83 (9th Cir. 2001). “Judicial estoppel 

will be imposed when the debtor has knowledge of enough facts to know that a potential 

cause of action exists during the pendency of the bankruptcy, but fails to amend his 

schedules or disclosure statements to identify the cause of action as a contingent asset.” 

Id. at 784. The duty to disclose contingent claims continues throughout the bankruptcy 

proceeding. Id. at 785. Not all facts need be known before a debtor is required to notify 

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the bankruptcy court of the potential asset. See Hay v First Interstate Bank of Kalispell, 

N.A., 978 F.2d 555, 557 (9th Cir. 1992). Thus, a plaintiff who fails to fulfill this duty to 

inform the bankruptcy court of potential claims risks having those claims barred by 

judicial estoppel. Becker v. Wells Fargo Bank, N.A., 2012 WL 5187792, at *3 (E.D. Cal. 

Oct. 18, 2012). Because the plaintiff-debtor represents in the bankruptcy case that no 

claim existed, the plaintiff is estopped from representing in the lawsuit that a claim does 

exist. Ah Quin v. Cnty. Of Kauai Dep’t of Transp., 733 F.3d 267, 271 (9th Cir. 2013).

Courts employ a three-part test to determine whether judicial estoppel should bar 

a party’s claims: (1) whether the party’s later position is clearly inconsistent with its 

original positon; (2) whether the party has successfully persuaded the court of the earlier 

position; and (3) whether allowing the inconsistent position would allow the party to 

derive an unfair advantage or impose and unfair detriment to the opposing party. 

Hamilton, 270 F.3d at 782-83; United States v. Ibrahim, 522 F.3d 1003, 1009 (9th Cir. 

2008); Cagle v. C & S Wholesale Grocers, Inc., 505 B.R. 534, 538 (E.D. Cal. 2014). A 

court can decline to apply judicial estoppel where the inconsistent positions were the 

result of mistake or inadvertence. Ah Quin, 733 F.3d at 271-72.

In Hamilton, the Ninth Circuit affirmed an application of judicial estoppel to 

preclude a plaintiff from bringing claims against his insurance company after he failed to 

list those claims as assets on his Chapter 7 bankruptcy schedule. 270 F.3d at 785. 

Failure to list potential claims “deceived the bankruptcy court and [plaintiff’s] creditors,”

who relied on the schedules. Id. Similarly, the court in Becker applied judicial estoppel 

when a plaintiff filed suit against a mortgage lender alleging wrongful conduct related to 

a residential loan and foreclosure. 2012 WL 5187792, at *3-4. The Becker court found 

the plaintiff to be estopped from bringing his claim after omitting the claim from his 

bankruptcy filings and failing to file an amended schedule. Id. at *4. See also Reagan v. 

Wells Fargo Bank, N.A., 2013 WL 1402990 (E.D. Cal. Apr. 5, 2013) (applying judicial 

estoppel where claims arose during bankruptcy proceedings); Arruda v. C & H Sugar 

///

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Co., Inc., 2007 WL 754627 (E.D. Cal. Mar. 8, 2007) (applying judicial estoppel for failure 

to include employment claims on bankruptcy schedules).

A. Judicial Estoppel Bars Plaintiffs’ Claims

Plaintiffs’ claims arose prior to the bankruptcy petition and should have been 

included on Carolyn’s bankruptcy schedules. Even giving Plaintiffs some leeway in their 

awareness of facts relating to their claim, there is no doubt that they were aware of 

sufficient facts giving rise to the claims alleged in this action, such that the claims should 

have been listed in the bankruptcy schedule. The essential facts giving rise to Plaintiffs’ 

claims are: an alleged failure to provide notice of servicing transfer “sometime in the 

fourth quarter of 2014,” a broken promise to postpone the foreclosure sale; and the 

ultimate foreclosure sale on January 27, 2015. ECF No. 1, ¶¶ 17, 26, 34. Plaintiffs do 

not dispute that these events all occurred prior to the bankruptcy petition. Plaintiffs’ 

Complaint makes clear that Plaintiffs were aware of problems with loan servicers as of 

January 27, 2015. ECF No. 1, ¶¶ 18-19. The Complaint also makes clear that by 

January 27, 2015, Plaintiffs learned that the foreclosure sale had occurred, in violation of 

the purported promise to postpone the sale. ECF No. 1, ¶ 26. In addition, their claim 

for quiet title is rooted in events that led to the foreclosure. ECF No. 1, ¶¶ 32-34. Even 

assuming that Plaintiffs were not aware of all facts having to do with their claim, it is clear 

that they knew enough to require disclosure to the bankruptcy court. See Hay, 978 F.2d 

at 557.

The Hamilton factors support application of judicial estoppel to Plaintiffs’ claims. 

First, Plaintiffs’ positions were clearly inconsistent. Plaintiffs represented to the 

bankruptcy court that they did not possess any contingent claims as assets. Now, 

Plaintiffs seek to bring those unlisted claims in this Court. Plaintiffs argue that they were 

unaware of their claims until consulting with a lawyer and, presumably, seek to claim 

inadvertence or mistake in failing to disclose their claims. ECF No. 18 at 3. However, 

Plaintiffs point to no facts which might overcome a presumption of deliberateness in 

failing to schedule causes of action. See Ah Quin, 733 F.3d at 272-73 (“[G]iven the 

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strong need for full disclosure in bankruptcy proceedings . . . it makes sense to apply a 

presumption of deliberate manipulation.”) Plaintiffs have not sought to reopen their 

bankruptcy to amend their schedules in the months following the bankruptcy and the 

beginning of this action. See Dzakula v. McHugh, 746 F.3d 399, 401-402 (9th Cir. 2013) 

(no showing of inadvertence or mistake without timely amendment); Ah Quin, 733 F.3d 

at 272-73 (presumption of deliberate manipulation not appropriate where plaintiff has 

reopened bankruptcy to correct error). In light of the failure to disclose and the 

subsequent failure to amend, there is no reason to assume that Plaintiffs’ inconsistent 

representations were anything but deliberate.

Second, Plaintiffs successfully persuaded the court of the earlier position (that 

they did not possess these claims). A discharge of debt by a bankruptcy court is 

sufficient acceptance of a debtor’s assertions to provide a basis for judicial estoppel. 

Hamilton, 270 F.3d at 784. In this case, Plaintiffs represented to the bankruptcy court 

that they had no contingent claims. The bankruptcy court relied on this representation 

when it granted Plaintiffs’ bankruptcy discharge. 

Finally, Plaintiffs derived an unfair advantage in bankruptcy court by failing to list 

their claims. Plaintiffs’ bankruptcy trustee and creditors relied on Plaintiffs’ bankruptcy 

schedules to determine what action, if any, they would take in the bankruptcy 

proceeding. See Hamilton, 270 F.3d at 785 (finding unfair advantage where plaintiff 

received a Chapter 7 discharge). 

Plaintiffs’ failure to disclose their claims satisfies the Hamilton factors. Plaintiffs 

are therefore judicially estopped from pursuing the present claims against Defendants.

B. Plaintiff Darwin Talosig’s Claims Are Part of the Bankruptcy Estate

Plaintiffs argue that even if Plaintiff Carolyn Talosig’s claims are judicially 

estopped, Plaintiff Darwin Talosig’s claims are not barred. Plaintiffs argue that only 

Carolyn filed for bankruptcy, and thus only her claims are barred.

The bankruptcy estate includes “all interests of the debtor and the debtor's 

spouse in community property as of the commencement of the case.” 11 U.S.C. 

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§ 541(a)(2). In California, property acquired in joint form during marriage is presumed to 

be community property. See Cal. Fam. Code §§ 760, 2581. Thus for the purposes of 

§ 541(a)(2), all community property not divided at the time of the bankruptcy filing is 

property of the bankruptcy estate. In re Mantle, 153 F.3d 1082, 1085 (9th Cir. 1998).

Plaintiffs’ present claims, which arose during the marriage, are community 

property. The claims, as community property of the debtor (Carolyn) and the debtor’s 

spouse (Darwin), became property of the bankruptcy estate when Carolyn petitioned for 

bankruptcy. Carolyn was therefore required to disclose the claims on her bankruptcy 

schedules. She failed to do so. Because of this failure, the Court invokes judicial 

estoppel to bar both Plaintiffs’ claims.

CONCLUSION

Defendants’ Motion to Dismiss (ECF No. 5) is GRANTED without leave to amend. 

The Clerk of the Court is directed to close this case. 

IT IS SO ORDERED.

Dated: February 16, 2016

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