The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
Defendant seeks dismissal of Plaintiff's First Amended Complaint ("FAC"), arguing, inter alia, "Plaintiff failed to disclose any of her claims here as assets in her bankruptcy petition, and she thereby lacks standing." (Def.'s Mot. 16:3-4.) Plaintiff opposes the motion; however, Plaintiff construes Defendant's standing argument as a judicial estoppel argument, countering as follows: "Plaintiff is not taking a position inconsistent with an earlier position. At the time of her bankruptcy there was no lawsuit to list on bankruptcy schedules. Ms. Coward had no idea she would be filing a lawsuit against Chase." (Pl.'s Opp'n 9:5-7.)
"A plaintiff has the burden of establishing the elements required for standing, and 'for purposes of ruling on a motion to dismiss for want of standing, . . . the trial . . . court must accept as true all material allegations of the complaint, and must construe the complaint in the favor of the complaining party.'" Takhar v. Kessler, 76 F.3d 995, 1000 (9th Cir. 1996) (quoting Warth v. Seldin, 422 U.S. 490, 501 (1975)). However, this tenet "is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Further, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007)).
"[D]ebtor standing is ordinarily prudential . . . ." Pershing Park Villas Homeowners Ass'n v. United Pac. Ins. Co., 219 F.3d 895, 901 n.3 (9th Cir. 2000) (citing Sierra Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 708 n.1 (9th Cir. 1986)). "[T]he prudential doctrine of standing has come to encompass several judicially self-imposed limits on the exercise of federal jurisdiction. Principles of prudential standing are not ordained by the Constitution, but constitute rather rules of practice, albeit weighty ones." Id. at 899 (internal quotation marks and citations omitted). Therefore, "prudential standing [is] not a requirement of jurisdiction." Hilton v. Hallmark Cards, 599 F.3d 894, 904 n.6 (9th Cir. 2010). "For [Plaintiff] to have standing, [she], rather than the bankruptcy estate, must own the claim upon which [she] is suing." Cusano v. Klein, 264 F.3d 936, 945 (9th Cir. 2001). "An 'estate' is created when a bankruptcy petition is filed. Property of a bankruptcy estate includes 'all legal or equitable interests of the debtor in property as of the commencement of the case.' . . . [A]ssets of the estate properly included any of [a debtor's] causes of action." Id. (internal citations omitted); see also Engram v. Manera, 348 F. App'x 305, 306 (9th Cir. 2009) (applying this principle to Chapter 7 bankruptcy proceedings). Further, "[c]auses of action are separate assets which must be formally listed. Simply listing the underlying asset out of which the cause of action arises is not sufficient." Cusano, 264 F.3d at 947 (internal citations omitted).
"The bankruptcy code place[s] an affirmative duty on [a debtor] to schedule his assets and liabilities. If he failed to properly schedule an asset, including a cause of action, that asset continues to belong to the bankruptcy estate and [does] not revert to [the debtor]." Id. at 945-46 (internal citations omitted). Once claims belong to the bankruptcy estate, "[t]he plaintiff-debtor has no standing to bring [them] unless he can show that the claims were (1) exempt from the bankruptcy estate or (2) abandoned by the bankruptcy trustee. If neither apply, the claims belong to the bankruptcy estate and in turn must be asserted by the bankruptcy trustee rather than the debtor." Rowland v. Novus Fin. Corp., 949 F. Supp. 1447, 1453 (D. Haw. 1996); see also Fresno Rock Taco LLC v. Rodriguez, No. 1:11-cv-00622, 2011 WL 5240444, at *3 (E.D. Cal. Nov. 1, 2011) ("To prove [the bankruptcy estate does not own Plaintiffs' claims], Plaintiffs must show that the cause of action is either exempt from the bankruptcy proceedings, or was abandoned by the Trustee.").
A cause of action is exempt from the proceedings if it accrues after a debtor files for bankruptcy since "generally, a debtor has no duty to schedule a cause of action that did not accrue prior to bankruptcy." Cusano, 264 F.3d at 947 (internal citations omitted); see also In re Adair, 253 B.R. 85, 90 (9th Cir. 2000) ("The Bankruptcy Code and Rules require that a debtor supplement the information in his or her schedules only in limited circumstances."). "To determine when a cause of action accrues, we look to state law." Cusano, 264 F.3d at 947 (internal citations omitted). Under California law, "[t]he general rule for defining the accrual of a cause of action sets the date as the time when, under substantive law, the wrongful act is done, or the wrongful result occurs, and the consequent liability arises. . . . In other words, it sets the date as the time when the cause of action is complete with all of its elements." Investors Equity Life Holding Co. v. Schmidt, 195 Cal. App. 4th 1519, 1531 (2011) (internal quotation marks and citations omitted).
Plaintiff and her husband filed a Chapter 7 bankruptcy petition on December 17, 2009; the claims alleged against Defendant in this action were not included in the schedules of assets. (Def.'s Req. for Judicial Notice Ex. B.)*fn1 Defendant argues as follows concerning its assertion that Plaintiff lacks standing:
[P]laintiff's loan was originated in October 2005, and she alleges she was denied a permanent modification in August 2009. Plaintiff was well aware of the facts underlying the claims she seeks to assert in this action before she filed her first bankruptcy petition on December 17, 2009.
(Def.'s Mot. 17:20-23.) Plaintiff counters that "there is no judicial estoppel in this case." (Pl.'s Opp'n 9:11.)
Plaintiff alleges the following facts in support of each of her claims:
In October 2005, Plaintiff and her husband Ronnie L. Coward entered in to a mortgage agreement with Long Beach Mortgage Company (hereafter "LBMC"), a subsidiary of Washington Mutual (hereafter "WAMU"). LBMC was one of the leading wholesalers of subprime mortgages at the time, and is now out of business. At the time of the loan, and at all relevant times thereafter, LBMC, WAMU, and CHASE representatives made numerous misrepresentations regarding the terms of the loan. One of the many representations that was particularly egregious and continued to be perpetrated until after foreclosure was the misrepresentation that the loan documents would be fully executed and valid without the signature of Mr. Coward. This representation was made despite the fact that Mr. Coward's income and guarantee was required for the mortgage to be approved, and despite the fact that a signature line for Mr. Coward appeared on all necessary pages of the loan documents. At the time the loan documents were signed, Mr. Coward was overseas in the military and unavailable.
In 2007, Plaintiff met WAMU/CHASE representative Patty Lepe at a foreclosure seminar. Plaintiff applied for loan modification and provided Ms. Lepe with all necessary documentation including documentation showing that because Mr. Coward had been injured, the total monthly household income was $1500. After reviewing Plaintiff's application, WAMU and Plaintiff entered in to a written modification agreement where Plaintiff's monthly payment would total $1579. However, when Plaintiff went to make her first payment, the monthly payment amount was increased to $1988. As Plaintiff was on a fixed household income of $1500/month, she disputed this amount with Ms. Lepe, and Ms. Lepe assured Plaintiff that she would correct the "error" and that Plaintiff's monthly payments would be $1579. However, despite WAMU/CHASE representatives' repeated assurances, Plaintiff's payments were never reduced to $1579 as required under the initial modification agreement.
In 2008 and 2009, Plaintiff applied to CHASE to have her loan re-modified. In fact, Plaintiff submitted numerous applications at the request of CHASE. Apparently, some of the applications were reviewed under CHASE guidelines and some were reviewed under newly enacted HAMP guidelines. Over these months, unbelievably, Plaintiff submitted 18 loan modification applications at CHASE's request. Plaintiff was repeatedly assured by CHASE representatives that she qualified for loan modification. She was repeatedly told that she qualified under both CHASE guidelines and later under HAMP guidelines. CHASE representatives encouraged her to apply for HAMP modification, and requested re-application numerous times in 2009. . . .
Finally, Plaintiff was approved for a new trial modification under HAMP. For reasons unknown to Plaintiff, the trial modification required monthly payments of $2045, which higher than previously agreed, and not a reduction in payments as required by HAMP. The agreement was memorialized by memorandum, and Plaintiff made her three ...