IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-10468

In the Matter of: R.E. LOANS, L.L.C.; R.E. FUTURE, L.L.C.; CAPITAL 

SALVAGE, a California Corporation,

Debtors

WELLS FARGO CAPITAL FINANCE, L.L.C.,

Appellant

v.

GORDON NOBLE; ARLENE DEA DEELEY; FREDRIC C. MENDES; 

NANCY RAPP; PHILLIP CANTOR; JOHN EMANUELE; IRENE LEE; 

DAVID NOLAN,

Appellees

Appeal from the United States District Court

for the Northern District of Texas

U.S.D.C. No. 3:12-cv-3513

Before REAVLEY, PRADO, and OWEN, Circuit Judges.

PER CURIAM:*

Before the Court is Defendants–Appellees’ Motion to Dismiss the Appeal 

as Moot. For the reasons stated herein, we grant the motion and dismiss the 

appeal as moot.

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

February 5, 2014

Lyle W. Cayce

Clerk

 

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No. 13-10468

I. FACTUAL AND PROCEDURAL BACKGROUND

Defendants–Appellees Gordon Noble, Arlene Dea Deeley, Fredric C. 

Mendes, Nancy Rapp, Phillip Cantor, John Emanuele, Irene Lee, and David 

Nolan (the “Class Plaintiffs”) filed a consolidated putative class action 

complaint (the “Consolidated Complaint”) in California state court against 

Plaintiff–Appellant Wells Fargo Capital Finance, L.L.C. (“Wells Fargo”). The 

present appeal stems from Wells Fargo’s attempt to attack the Consolidated 

Complaint through an action in the United States Bankruptcy Court for the 

Northern District of Texas.

The Class Plaintiffs are former investors in R.E. Loans, LLC (“REL”). 

REL is a hard-money lender that raised funds to make real estate secured 

loans to real estate developers. Suffering from a liquidity shortage, REL 

entered into a senior secured credit facility with Wells Fargo in July 2007. 

Later, in November 2007, REL and its member–investors, including the Class 

Plaintiffs, entered into a transaction (the “Exchange Offering”) wherein the 

member–investors exchanged their equity interest in REL for junior secured 

notes issued by REL. As the real estate market worsened, so did REL’s 

financial condition. Ultimately, REL filed for bankruptcy in the United States

Bankruptcy Court for the Northern District of Texas. Under its Chapter 11 

Plan of Reorganization, the REL estate released all claims against Wells Fargo 

that were property of the REL estate on the effective date of the plan.

In their Consolidated Complaint, the Class Plaintiffs allege that they 

were induced into participating in the Exchange Offering through 

misrepresentations the managers of REL made to them, and that Wells Fargo 

provided assistance in the managers’ misrepresentations. Wells Fargo, in 

turn, commenced an adversary proceeding in the bankruptcy court, and moved 

therein to enjoin prosecution of the Consolidated Complaint on the ground that 

the asserted causes of action were property of the REL estate and that the REL

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estate had released all claims against Wells Fargo. Specifically, Wells Fargo 

argued that the Consolidated Complaint sought recovery for harm to REL and 

that the Class Plaintiffs’ injuries were derivative of, and secondary to, the 

harm REL allegedly suffered.

The bankruptcy court denied the motion and dismissed the adversary 

proceeding. On appeal, the United States District Court for the Northern 

District of Texas affirmed in part and reversed in part. The district court 

considered the facial allegations in the Consolidated Complaint and affirmed 

the denial of an injunction as to the cause of action stemming from the Class 

Plaintiffs’ entry into the Exchange Offering. The district court reasoned that 

the cause of action sought to recover for personal injury to the Class Plaintiffs 

and, thus, was not property of the REL estate. The district court reversed as 

to the other causes of action. Wells Fargo appeals the affirmance.

II. THE CLASS PLAINTIFFS’ MOTION TO DISMISS

On August 2, 2013, after Wells Fargo filed its opening brief, the Class 

Plaintiffs filed a Motion to Dismiss the Appeal as Moot. Mootness “is ‘the 

doctrine of standing in a time frame. The requisite personal interest that must 

exist at the commencement of litigation (standing) must continue throughout 

its existence (mootness).’” Ctr. for Indiv. Freedom v. Carmouch, 449 F.3d 655, 

661 (5th Cir. 2006) (quoting U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 

397 (1980)). A case may become moot when “an intervening factual event . . . 

causes the plaintiff to no longer have a present right to be vindicated or a stake 

or interest in the outcome.” Dailey v. Vought Aircraft Co., 141 F.3d 224, 227 

(5th Cir. 1998). However, “[a] case should not be declared moot ‘[a]s long as 

the parties maintain a “concrete interest in the outcome” and effective relief is 

available to remedy the effect of the violation.’” Envtl. Conservation Org. v. 

City of Dall., Tex., 529 F.3d 519, 527 (5th Cir. 2008) (quoting Dailey, 141 F.3d 

at 227).

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According to the Class Plaintiffs, Wells Fargo’s appeal seeks review of 

the district court’s interpretation of the facial allegations in the Consolidated 

Complaint. However, the Class Plaintiffs argue, because the Consolidated 

Complaint has been superseded in California state court by a “significantly 

amended” complaint (the “Third Amended Complaint”) and because the Third 

Amended Complaint is not before this Court,1 the present appeal should be 

dismissed as moot. 

Though conceding that the Third Amended Complaint is “different in 

several respects from the Consolidated Complaint,” Wells Fargo responds that 

“the Third Amended Complaint does not abandon the claims at issue in this 

appeal” involving the Exchange Offering. Therefore, Wells Fargo argues, it

has a concrete interest in the outcome and effective relief is available because 

the Consolidated Complaint and the Third Amended Complaint “allege the 

same theories of harm in connection with the Exchange Offering.”

We disagree. The crux of this appeal, and of the underlying adversary 

proceeding, challenges “[w]hether a specific cause of action belongs to a 

bankruptcy estate[—]a matter of law that [the reviewing court will] decide by 

reference to the facial allegations in the complaint.” In re Seven Seas 

Petroleum, Inc., 522 F.3d 575, 583 (5th Cir. 2008) (citing In re Educators Grp.

Health Trust, 25 F.3d 1281, 1285 (5th Cir. 1994)). In the adversary proceeding 

below, Wells Fargo challenged only the allegations in the Consolidated 

Complaint. Similarly, on appeal, Wells Fargo has raised only the causes of 

action asserted in the Consolidated Complaint.

The Consolidated Complaint, however, is no longer the operative

complaint and has no legal effect because the Third Amended Complaint has 

1 Wells Fargo is currently challenging the Third Amended Complaint in a newly filed 

adversary proceeding in the United States Bankruptcy Court for the Northern District of 

Texas.

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superseded it and does not incorporate the Consolidated Complaint. See, e.g., 

King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“An amended complaint 

supersedes the original complaint and renders it of no legal effect unless the 

amended complaint specifically refers to and adopts or incorporates by 

reference the earlier pleading.”); Foreman & Clark Corp. v. Fallon, 3 Cal. 3d 

875, 884 (1971) (“It is well established that an amendatory pleading supersedes 

the original one, which ceases to perform any function as a pleading.” (citing

Meyer v. State Bd. of Equalization, 42 Cal. 2d 376, 384 (1954))). We need not 

decide whether the amendment of the complaint, alone, is sufficient to moot 

this appeal. It suffices to hold that the facts alleged in the Third Amended 

Complaint are sufficiently different from those the bankruptcy court and 

district court reviewed below. The differences between the two complaints are

such that Wells Fargo no longer has a right to be vindicated or a stake in the 

outcome of the Consolidated Complaint. Wells Fargo’s appeal is moot.

III. CONCLUSION

Accordingly, we GRANT the Class Plaintiffs’ motion to dismiss the 

appeal and DISMISS Wells Fargo’s appeal as moot.

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