1 U NI TED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

) NATASHA DALLEY , ) ) Plaintiff , ) ) v. ) No. 15

– cv - 0875 (KBJ) ) MITCHELL RUBENSTEIN & ASSOCIATES , P.C. ) ) Defendant

. ) )

MEMORANDUM OPINION On June 9, 2014, Defendant Mitchell Rubenstein & Associates, P.C. (“MRA”) filed a lawsuit against Plaintiff Natasha Dalley in the Superior Court of the District of Columbia , seeking to recover the amount that Dalley owed on a defaulted 2002 student loan. MRA’s lawsuit was stayed on November 6 , 2014, after Dalley filed for Chapter 7 bankruptcy. Dalley then turned the tables on MRA: she brought the instant lawsuit , arguing that MRA’s prosecution of the aforementioned civil action violated the Fair Debt Collecting Practices Act (“FDCPA”) , 15 U.S.C. § § 1692

– 1692p , and the District of Columbia Debt Collection Law (“DCDCL”), D.C. Code § 28

- 3814 , and also that it amounted to common law abuse of process. ( See generally 2 d Am. Compl ., ECF No. 7.) Before this Court at present is MRA’s motion to dismiss Dalley’s second amended c omplaint under Federal Rule of Civil Procedure 12(b)(1) . ( See Def.’s Mot. to Dismiss 2d Am. Compl. (“Def.’s Mot.”), ECF No. 11.) MRA alleges , among other2 things, that Dalley lacks standing to sue because the right to bring this lawsuit to recover damages for alleged violations of federal and state collections practice laws was transferred to the trustee of the b ankruptcy estate when Dalley voluntarily petitioned for Chapter 7 bankruptcy , and this property right has not been abandoned by t hat t rustee to date. ( See id . at 17.) 1 In response, Dalley contends that she has stan ding to bring her FDCPA claim s notwithstandi ng the bankruptcy, because her claim s were exempt ed from her bankruptcy estate under the “wild card” exemption in the bankruptcy code and also because her FDCPA claim s qualify as “payment [s]

. . . on account of personal bodily injury [.] ” ( See Pl.’s Opp’n to Def. ’ s Mot. (“Pl.’s Opp’n ”) , ECF No. 12 , at 5

– 6

. ) For the reasons explained below , this Court concludes that Dalley lacks standing

to file th e instant action in federal court, and as a result , MRA ’s motion to dismis s under Rule 12(b)(1) for lack of standing will be GRANTED

. A separate order consistent with this Memorandum Opinion will follow.

I. BACKGROUND A. Fact s O n behalf of the National Collegiate Student Loan Trust (“NCSLT”) , MRA filed a lawsuit against Dalley in Superior Court o n June 9, 2 014. ( See 2d Am. Compl. ¶¶ 9, 11.) MRA’s S uperior Court complaint claimed that Dalley had defaulted on a private student loan in 2002 , and it sought to recover the principal and accrued interest with respect to that loan

. ( See id

. ¶ 9 ; Aff. of Natasha Dalley (“Dalley Aff.”), ECF No. 13, ¶ 6 .) Dalley alleges that , because of MRA’s lawsuit, she was forced to “ file [] for

1 Page number s herein refer to those that the Court’s electronic case filing system automatically assigns.3 Chapter 7 bankruptcy protection in the United States Bankruptcy Court for the District of Columbia.” ( See 2d Am. Compl. ¶ 14.) Dalley ’s voluntary bankruptcy petition , which was filed on October 18, 2014, did not list any outstanding lawsuits or other causes of action in the Schedule B itemization of assets or in the Schedule C claims of exempt property

. ( S ee Voluntary Bankr. Pet

. , Ex. B to Pl.’s Opp’n, ECF No. 12

- 2 , at 2

– 4, 10

– 15

. ) On November 6, 2014 , “the [Superior] court stayed NCSLT’s lawsuit” in light of Dalley’s Chapter 7 voluntary petition ( see Bankr. Mot. for Sanctions, Ex. E to Pl.’s Opp’n, ECF No. 12

- 5, at 2

– 3 ), which halted the loan

- recovery proceedings by operation of law

. See In re McGuirl , 349 B.R. 759, 760 (D.D.C. 2006) (“ The filing of a petition for bankruptcy relief triggers an automatic stay that prohibits unilateral actions against the debtor o r property of the debtor ’ s estate. ” (citing 11 U.S.C. § 362 ) ). Then, o n January 27, 2015, the bankruptcy court discharged Dalley ’s debts in the context of the Chapter 7 proceedings , thereby closing her bankruptcy case. ( S ee Bankr. Ct. Discharge of Debtor Order, Ex. B to Def.’s Mot., ECF No. 11

- 4, at 1.)
B. Procedural History Approximately five months later, on June 9, 2015, Dalley filed the instant lawsuit against MRA. Dalley’s s econd amended complaint alleges that MRA’s debt

collection law suit w as time

- barred because it was filed “three days after the three

- year statute of limitations [had] expired ” ( 2d Am. Compl. ¶ 11 ) , and that NCSLT “never had the legal capacity” to sue Dalley

— or to authorize MRA to sue Dalley

— to recover the loan amount . ( Id

. ¶ 22 .) Furthermore, a ccording to Dalley , the filing of this purportedly untimely and unauthorized civil action was tantamount to an unla wful debt collection practice. A ccordingly , Dalley alleges that MRA intentionally, willfully, and4 maliciously viola ted several subsections of the FDCPA (Count One) and the DCDCL (Count Two) , and that th e filing of MRA ’ s lawsuit also amounted to abuse of process (Count Three). ( S ee id

. ¶ ¶ 25

– 47

. ) On July 20, 2015, MRA filed a motion to dismiss Dalley’s second amended complaint for lack of jurisdiction under Rule 12(b)(1) , alleging that Dalley does not have standing to sue because , “even though this pre

- petition claim was not specifically listed on Dalley ’s bankruptcy schedules,” it nonetheless and necessarily became th e property of the bankruptcy estate when she petition ed for Chapter 7 bankruptcy , and having not abandoned that claim, the bankruptcy t rustee remains the only one with standing to pursue it. ( Def.’s Mot. at 17.) In addition , MRA’s motion to dismiss argues that the doctrine of judicial estoppel bars Dalley from bringing this law suit because she excluded the cause of action from her list of assets in the bankruptcy proceeding in bad faith , and the intentional omission is inconsistent with the positio n she has taken before this Court

. ( See id . at 17

– 21

. ) See also Frese v. Empire Fin

. Serv s. , 725 F. Supp. 2d
130 , 140 ( D.D.C. 2010) (explaining that “ judicial estoppel is appropriate when a debtor fails to identify a claim in a bankruptcy proceeding ” thereby taking the position that she holds no actionable claim, “ and then proceeds to assert that clai m in a separate judicial action ” in direct contravention to her bankruptcy position )

. Dalley has responded to MRA’s motion to di smiss

— foc using solely on the FDCPA count , she asse rts that she has standing to sue because her “FDCPA claims ” are “ personal bodily injur y claims” that are “ exemp ted from estate property under [section] 522(d)(11) ” of the bankruptcy5 code and under section 522(d)(5)’s “wild card” exemption. (Pl.’s Opp’n at 5

– 6.)

. 2
MRA’s motion to dismiss for lack of standing is now ripe for th is Court’s review.

II. LEGAL STANDARD A motion to dismiss for lack of standing alleges a defect in the court’s subject matter jurisdiction and is properly addressed under Rule 12(b)(1). See Fed. R. Civ. P. 12(b)(1); Haase v. Sessions , 835 F.2d 902, 906 (D.C. Cir. 1987). To defeat a motion to dismiss brought u nder Rule 12(b)(1), a plaintiff bears the burden of “ set[ting] forth allegations suffici ent to establish the court’s jurisdiction over the subject matter of the claims presented.” Evans v. First Mount Vernon, ILA , 786 F. Supp. 2d 347, 351 (D.D.C. 2011). In de ciding such a motion, the court “must accept as true all of the factual allegat ions contained in the complaint and draw all reasonable infer ences in favor of the plaintiff ” ; however, it need not “ accept inferences unsupported by the facts alleged or legal conclusions that are cast as factual allegations.” Id. (internal quotation marks and citations omitted). Further more , “[i] n 12(b)(1) proceedings, it has been long accept ed that the judiciary may make appropriate inquiry beyond the pleadings to satisfy itself on authority to entertain the case. ” Haase , 835 F. 2d at 906 (internal quotation marks and citation omitted).

2 As noted , Dalley’s response to MR A’s standing argument addresses whether she can bring an FDCPA claim notwithstanding the bankruptcy, and does not purport to mention the issue of standing in rega rd to the claims she has alleged under the DCDCL and common law. It is not clear whether Dalley intends for her standing a rguments to relate to all three counts of her complaint, and her reasons for parsing the claims in this fashion when responding to defendant’s lack

- of

- standing contention are not immediately apparent to this C ourt. Nevertheless, the Court treats Dall ey’s silence with respect to MRA ’s assertion that she lacks standing to bring DCDCL and abuse of process claims as a concession on Dalley ’ s part that she has no standing to pursue those claims. See Rosenblatt v. Fenty , 734 F. S upp. 2d 21, 22 (D.D.C. 2010) ( “[A]n argument in a dispositive motion that the opponent fails to address in an opposition may be deemed conceded.” ). For that reason, this Memorandum Opinion reaches and resolves the only contested issue related to standing: whether Dalley lacks standing to pursue the claims raised in the complaint’s FDCPA count

.6 III. ANALYSIS MRA argues that the FDCPA claims that Dalley brings in Count One of the instant lawsuit became pa rt of the bankruptcy estate when Dalley filed for Chapter 7 bankruptcy , despite the fact that Dall e y omitted those claims from the list of assets in the bankruptcy schedules , and that t he trustee has not abandoned tho se claims such that Dalley has standing to pursue them . ( See Def.’s Mot. at 9

– 13 , 17 .) Thus , according to MRA, the bankruptcy t rustee is the only party w ith standin g to b ring the instant lawsuit

. ( See id. at 13, 17. ) For the reasons explained below, and a ssuming for the purpose of this analysis that Dalley has forfeited any objection to MRA’s standing argument with respect to the DCDCL and abuse of process claims ( see supra note 2 ) , this Court agrees with MRA

. A. Dalley’s Cause Of Action Is Part Of Her Bankruptcy Estate I t is well established that, u pon the filing of a Chapter 7 bankruptcy petition, “all legal or equitable interests, including causes of action on behalf of the debtor, are transferred from the debtor to the bankruptcy estate.” Marshall v. Honeywell Tech. Solutions, Inc ., 675 F. Supp. 2d 22, 24 (D.D.C. 2009) (citing 11 U.S.C. § 541(a)(1)) ; see also Robinson v. District of Columbia , 10 F. Supp. 3d 181 , 187 ( D.D.C. 2014) (explaining that “ [ t ] he debtor need not know all the facts or even the legal basis for the cause of action; rather, if the debtor has enough in formation

. . . to suggest that it may have a possible cause of action , then that is a known cause of action such that it must be disclosed ” in the bankruptcy schedules and considered part of the bankruptcy proceeding (emphasis and alterations in original) ( internal quotation marks and citation omitted))

. Furthermore, o nce a pre - petition cause of action becomes part of a bankruptcy estate, the debtor’s legal rights and interests in that legal action

— including7 the standing to pursue it

— transfer to the bank ruptcy trustee , who is acting on behalf of the estate. See Moses v. Howard Univ. Hosp. , 606 F.3d 789, 795 (D.C. Cir. 2010); see also In re Bailey , 306 B.R. 391, 392 (Bankr. D.D.C. 2004) (“ In a chapter 7 bankruptcy case, any unliquidated lawsuits initiated by a debtor prepetition ( or that could have been initiated by the debtor prepetition) become part of the bankruptcy estate subject to the sole direction and control of the trustee, unless exempted or abandoned or otherwise revested in the debtor .”). Dalley ’s c laim against MRA for violations of the FDCPA accrued before she filed the petition for bankruptcy on October 18, 2014 , because MRA’s debt

- recovery action preceded Dalley’s bankruptcy filing, and “ [t] he FDCPA protects (1) consumers (2) who have been subject ed to abusive, deceptive or unfair debt collection practices (3) by a debt collector (4) in an attempt to collect a debt. ” Muldrow v. EMC Mortg. Corp ., 657 F. Supp. 2d 171, 174

– 75 (D.D.C. 2009)

. Although Dalley attests in her affidavit that she did not “know” that she had a legal claim against MRA until after she filed for bankruptcy ( see Dalley Aff. ¶ 11), the facts alleged in the complaint, along with the accompanying documents in the record, demonstrate that Dalley had more than enough information when she petitioned for bankruptcy to suggest a possible FDCPA claim against MRA based on the underlying litigation in Superior Court.
S pecifically , Dalley was aware that she was a “ natural person obligated or alle gedly o bligated to pay any debt[,]” 15 U.S.C. § 1692a(3), and thus , qualified as a consumer under the FDCPA

. In addition , Dalley knew that MRA had attempted to collect the loan debt by filing a suit against her in Superior Court on June 9, 2014

. ( S ee Super. Ct. Compl. , Civ. No. 1 4

- 0004281, Ex. A to Pl .’s Opp’n , ECF. No. 12

- 1, at 2

. )8 She a lso knew, or should have known, that MRA ’ s lawsuit could be characterized as “abusive, deceptive or unfair” because (1) NCS LT p urportedly did not have the capacity

to sue her or to authorize MRA to sue her ( see Dalley’s An swer to Super. Ct. Compl. , Ex. A to Def.’s Reply, ECF No. 14

- 1), and (2 ) she allegedly had made the last payment on the loan in 2008 , over three years before MRA’s law suit , which was apparently beyond the applicable statute of limitations ( see Dalley Aff. ¶ 7 )

. Thus, when Dalley peti tioned for bankruptcy four months after MRA filed suit , the facts known to her were sufficient to give rise to an obligation to disclose a possible FDCPA claim against MRA, even if she was not specifically aware of the legal basi s for such action. Consequently , MRA is correct that the pre

- petiti on FDCPA claim was a known asset of Dalley ’s that became part of the bankruptcy estate upon her filing of a voluntary petition under Chapter 7. ( See Def.’s Mot at 17; Def.’s Reply at 5

– 6. ) Undaunted, Dalley asserts that her FDCPA claim s were not part of her bankruptcy estate because they were expressly exempted either under 11 U.S.C. § 522(d)(11)(D)

— a statutory provision that allows a debtor to schedule some payment s as exempt “on account of personal bodily injury, not including pain and suffering or

com pens ation for actual pecuniary loss ”

— or under the “wild card” exemption that applies to certain assets, including legal claims, as set forth in § 522(d)(5)

. ( See Pl.’s Opp’n at 5

– 6 (citing secti on 522(d)(5), which exempts a debtor’s “ aggregate interest in
any proper ty ” up to certain amounts that are automatically and periodically adjusted over time ) .) But Dalley’s second amended complaint does not allege that Dalley suffered any personal bodily injury as a result of MRA’s debt

- collection efforts ; furthermore, in this context, the wildcard exemption relates only to a debtor’s ability to9 recover some , or all , of the proceeds of a leg al claim if the trustee su ccessfully litigates that claim, and it does not vest in the debtor any legal right to pursue the claim herself.
See In re Fetner , 218 B.R. 262, 264 (Bankr. D.D.C. 1997) ( explaining that t he wild card exemption for legal claims “ is simply an interest in any potential recovery from the lawsuit, . . . not an absolute right to retain the lawsuit ” and that “[i] t is the trustee who has the capacity to prosecute a lawsuit on behalf of the estate ” (internal quotation marks and citation omitted) ). What is more, even if Dalley’s exemption arguments were meritorious , it is clear that claim ing exemption from the bankruptcy estate now , long after the bankruptcy proceedings have concluded, cannot give rise to sta nding to sue when the debtor failed to list the cause of action in her bankruptcy schedules prior to

commen cing the lawsuit. See Yelverton v. District of Columbia , 529 B.R. 1, 4 (D.D.C. 2014) ( explaining that “claiming an exemption” for a cause of act ion after filing suit does not “retroactively provide a debtor with standing” ). Thus , this Court easily concludes that, because Dalley failed to list the FDCPA claim s that she relates in Count One of her second amended complaint in the context of the bankruptcy proceedin g , and also because the alleged exemptions do not appear to permit Dalley to file the FDCPA claims that she seeks to bring here in any event , Dalley’s FDCPA claim s became the property of her bankruptcy estate upon her Chapter 7 filing , which means that Dalley does not have standing to pursue those claims in this
Court , unless the trustee abandoned t hem

. B. Nothing In The Complaint Or The Record Establishes That The Bankruptcy Trustee Abandoned Dalley’s FDCPA Claim s Under well

- settled law, t itle to claims that have been transferred to the bankruptcy estate to be handled by the trustee remains in the estate unless the cause of10 action is abandoned back to the debtor pursuant to § 554 of the Bankruptcy Code

. See 11 U.S.C. § 554 ( d )

. “Aba ndonment” is a term of art, and the limited circumstances under which abandonment can be deemed to have occurred are delineated in § 554 of the Bankruptcy Code, which states, in pertinent part: (a) After notice and a hearing, the trustee may abandon any pr operty 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. 11 U.S.C. § 554. This statute plainly establishes that there are three instances in which a cause of action that is part of the bankruptcy estate may be considere d “ abandoned ” by the trustee and thus may be pursued by the debtor: (1) when the trustee , upon his or her own volition, provides the interested parties with formal notice of the abandonment and an opportunity to be heard; (2) when the bankruptcy court , upon request of an interested party , orders the trustee to abandon th e cause of action after formal notice and a hearing; and (3) when the cause of action has been disclosed and scheduled as an asset by the debtor but not administered by th e trustee before closing of the bankruptcy

case

— “ i.e

. , [ when the trustee] does nothing to pursue the action , it will then be deemed abandoned by operation of law [,] ” Wissman v. Pittsburgh Nat ’l Bank , 942 F.2d 867, 873 (4th Cir. 1991)

. As for the relevant timing , “[i] t may be the case that abandonment of litigation claims retroactively returns the claims to the debtor as of the date [s] he files for11 bankruptcy [,] ” Yelverton , 529 B.R. at 3 (emphasis omitted) , and t hus, a plaintiff such as Dalley might arguably “retroactively obtain[] standing ” to sue based on a trustee’s subsequent abandonment of a cause of action , id

. But “[w]here nothing in the record shows that a trustee [ever] abandoned a debtor’s cause of action, dismissing a complaint brought by the debtor for lack of standing is proper.” Marsh all , 675 F. Supp. 2d at 26; see also Parker v. Wendy ’ s Int ’ l, Inc. , 365 F.3d 1268, 1272 (11th Cir. 2004) (stating that lack of standing, and not judicial estoppel, is the more appropriate defense where a debtor brings a claim that was not abandoned by th e trustee). So it is here. Dalley ’s second amended complaint does not specifically allege that the FDCPA cause of action was abandoned by any of the three established methods , nor does the record reveal any facts that demonstrate abandonment occurred with respect to the FDCPA claims at issue here

. That is, there are no alleged facts that , if taken as true, d emonstrate that the bankruptcy trustee voluntarily undertook to provide notice and to have a hearing to accomplish abandonment of Dalley ’ s FDCPA claims per subsecti on (a) , see 11 U.S.C. § 554(a), and there is neither allegation nor evidence that
any interested party requested a court order of abandonment with respect to Dalley’s
FDCP A claim pursuant to subsection (b) after notice and a hearin g , see id. § 554(b).
Furt hermore, it is clear that Dalley cannot rely upon sub section (c)

— which provides for abandonment by operation of law upon the closing of a bankruptcy case

— because it is undisputed that she failed to schedule her FDCPA claim as an asset before the closing of he r case in January of 2015

. See i d

. § 554(c). T here is no question that “assets that [a bankruptcy petitioner] had[] as of the date of filing [ bankruptcy ] , but that she did not add to her schedule , were not abandoned to her when the case was closed [ i.e. , they12 remain ed part of the bankruptcy estate ] , regardless of whether the failure to formally schedule the cause of action was innocent.” Marshall , 675 F. Supp. 2d a t 25 (emphasis added); see also Locapo v. Colsia , 609 F. Supp. 2d 156, 159 (D. N.H. 2009) (“[O]nce a bankruptcy case closes through administration of the estate, the debtor loses his rights in a cause of action he had at the time he sought bankruptcy protection but nevertheless faile d to list on his schedule.”)

. Thus , the mere fact that Dalley’s bankruptcy case closed without administration of her unscheduled FDCPA claim does not mean that her
FDCPA claims were abandoned by the trustee such that she is free t o bring them in
Court now. 3
The thrust of all this is quite conveniently summarized in the express terms of section 544 of Title 11 of the United States Code, which states that “[u] nless 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. § 544(d).
T his Court has already found that Dalley’s FDCPA claims became the property of her bankruptcy estate when she filed for Chapter 7 bankruptcy, see supra Part III.A, and even though those claims remaine d unadministered at the time Dalley ’ s bankruptcy case closed, t here is no thing in Dalley ’ s complaint or in the record that establishes that the bankruptcy trustee ever abandoned those claims. Consequ ently, there is no basis upon

3 If Dalley ’ s assertion that she amended the Schedule C bankruptcy form to include the FDCPA claim at some point after the filing of the in stant lawsuit ( see Pl.’s Opp’n at 7) w as intended to establish her right to sue, this Court finds that it does not do so. While it is clear beyond cavil that causes of action that a trustee has actually abandons generally revert to the debtor, see Moses , 6 06 F.3d a t 795 , the mere fact that a debtor lists a claim as exempt in her bankruptcy schedules at some point after fili ng a lawsuit regarding the claim does not result in actual abandonment. See Yelverton , 529 B.R. at 3 (expl aining that filing amended schedules to list the cause of action as exempt after bringing suit and after the bankruptcy case closed, does not suffice; rather, the debtor must follow section 554’s requirements to “compel a trustee to abandon”).13 which this Court can conclude that Dalley has standing to bring the instant FDCPA action

.
IV. CONCLUSION W hen a debtor files for Chapter 7 bankruptcy , she loses the legal standing to bring a lawsuit regarding a pre - petition cause of action that she did not disclose in her bankruptcy filings , unless or until the trustee a bandons that cause of action

. Dalley’s undisclosed FDCPA c laim s arose prior to her Chapter 7 bankruptcy declaration and nothing in the complaint or the record establishes that the bankruptcy trustee abandoned th ose claim s such that Dalley has standing to pursue them in this Court. Therefore, this Court lacks sub ject

- matter jurisdiction over Dalley’s complaint , and as set forth in the accompanying order, MRA ’s motion to dismiss will be GRANTED

.

DATE: March 18, 2016 

## Ketanji Brown Jackson KETANJI BROWN JACKSON United States District Judg e