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Morris v. Torres

United States District Court, S.D. California

February 22, 2018

James B. Morris, Plaintiff,
Marco A. Torres, Defendant.



         Defendant Marco Torres requests the Court dismiss plaintiff James Morris's complaint because it is time-barred. (Doc. No. 3-1 at 2.) After two motion hearings and supplemental briefing, it became clear that the core of Morris's claim is his unhappiness with the fact that the $442, 000 in his bankruptcy estate went to his ex-wife. Because Morris's complaint suffers on many fronts, the Court GRANTS Torres's dismissal motion and DISMISSES the complaint with prejudice.

         I. BACKGROUND

         Morris's complaint alleges legal malpractice against his former bankruptcy attorney, Torres. (Doc. No. 1-2 at 12.) In April 2014, represented by Torres, Morris filed for Chapter 11 bankruptcy. (Id. ¶¶ 4, 5.) Morris claims his Chapter 11 bankruptcy proceeding was involuntarily converted into a Chapter 7 proceeding because Torres's negligence and inaction prejudiced the trustee and the judge. (Id. ¶¶ 6, 7.) This prejudice, Morris states, “carried over to the Chapter 7 trustee . . . who also saw plaintiff as the devil incarnate.” (Id. ¶ 8.) In “mid-January 2015, ” Morris hired new attorneys, who informed him that he “might be facing criminal prosecution for bankruptcy fraud as a result of the negligence by Defendant in his prior representation of [Morris] during the first eight or so months of the bankruptcy action.” (Id. ¶ 8.) Morris's complaint states that because of Torres's negligence, his bankruptcy proceeding worsened, he was now facing criminal charges, and he was accused of abusing the bankruptcy system-a theory Torres seemingly encouraged. (Id. ¶¶ 9-11.) Torres also failed to file necessary documents within the allotted time, causing the trustee to file proceedings to begin the conversion process. (Id. ¶¶ 12-13.) Torres then failed to file any responsive briefs opposing the conversion to Chapter 7. (Id. ¶ 14.) After the bankruptcy proceeding was converted, Morris lost “$442, 000 in the trust fund to the Chapter 7 trustee and to Plaintiff's ex-wife . . . .” (Id. ¶ 17.) Morris sued Torres for legal malpractice and breach of fiduciary duties requesting the $442, 000 he lost as well as punitive damages under Cal. Civ. Code § 3294.

         At the first motion hearing, Morris, represented at the time by counsel, convinced the Court additional briefing was required to discuss the statute of limitations and the trustee's possible ownership of the malpractice claim. After supplemental briefing, the Court held another motion hearing. The arguments raised in supplemental briefing went beyond the scope of the Court's limits. Nevertheless, the Court entertained all issues raised in briefing and during the hearing regardless of scope.


         A Rule 12(b)(6) motion to dismiss tests a complaint's legal sufficiency. Fed.R.Civ.P. 12(b)(6). The Court must accept the complaint's allegations as true and construe all reasonable inferences in favor of the nonmoving party, but is not required to accept “legal conclusions” as true. Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009); Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a dismissal at this stage, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Fed.R.Civ.P. 8(a)(2) (stating a party's pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”).


         Pandora once opened a box and we all know how that story ended. Although not quite as dramatic, this case represents the be-careful-what-you-wish-for trope. After allowing supplemental briefing, the issues in this case became only muddier. While Torres argues dismissal is appropriate because the complaint is time-barred, the Court also finds the complaint fails to state a claim.

         A. The Complaint Fails to State a Claim

         Although Torres never raises this argument, the Court chooses to do so sua sponte. “The elements of a cause of action for attorney malpractice under California law are: (1) the duty to use such skill, prudence and diligence as members of the profession commonly possess; (2) breach of that duty; (3) a proximate connection between the breach and the injury; and (4) actual loss or damage.” Loyd v. Paine Webber, Inc., 208 F.3d 755, 759 (9th Cir. 2000). After reviewing the complaint, the dismissal motion briefing, the supplemental briefing, and two hearings with Morris, the Court finds the complaint fails to state a claim because it does not allege causation or damages.

         1. The Complaint Failed to Adequately Allege Causation

         To adequately allege a malpractice claim, Torres's actions must have been the substantial factor of the loss. Here, admittedly, there are superseding intervening factors which contributed to Morris's alleged injury. Looking at the initially alleged timeline, Torres failed to file responsive briefing which caused the bankruptcy court to convert his proceeding from Chapter 11 to Chapter 7, resulting in monetary loss. At first, it seemed to the Court that it was the conversion that caused the loss and injury. However, once Pandora's Box was opened, the facts became clouded. During the second hearing, Morris walked the Court through a new timeline where, after Torres's misstep, the bankruptcy was converted, but that was not the loss. The loss, Morris stated, was not the conversion (as he stated he had lost control when he filed bankruptcy, it did not matter to him which chapter it was under), but the loss was now where the money went. Relying on this new theory, however, Morris cannot prove causation because it was the trustee's decision-and not Torres's-on what to do with the $442, 000. Morris admits in his supplemental briefing, “[n]obody knew, or could anybody have possibly known, at the time of Chapter 7 conversion, what action the Chapter 7 trustee would take in the future and whether that action would actually injure Plaintiff.” (Doc. No. 18 at 5.) Thus, the trustee's actions became the superseding intervening cause between Torres's initial negligence (causing the conversion) and the alleged loss (the money going to Morris's ex-wife). As Torres's counsel pointed out during the second hearing, malpractice requires that different counsel could have yielded a different result, but here, no attorney could have controlled what the trustee did with the $442, 000. Thus, Morris failed to plead causation.

         2. The Complaint Failed to Adequately ...

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