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Mattfeld v. Griffee

United States District Court, D. Utah, Central Division

May 10, 2017



          Dustin B. Pead Magistrate Judge


         The parties consented to the court's jurisdiction under 28 U.S.C. 636(c). (ECF No. 12.) Plaintiff asserts four causes of action in this diversity matter: fraud, breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. (ECF No. 2.) Plaintiff claims that he and Mr. Griffee made an agreement in 2005 and 2006 that forms the basis of his present claims. As part of that agreement, Plaintiff purchased two pieces of real estate and Mr. Griffee agreed to collect rents from tenants and apply those rent payments to mortgages secured by the properties and to home-owner association dues. (Id.) Plaintiff claims Mr. Griffee performed for a time under the unwritten agreement, but in 2011, Plaintiff alleges M r. G r i ff ee began to misappropriate rent payments without satisfying the mortgages and dues. (See id.) The matter is presently before the court on Defendants' motion to dismiss. (ECF No. 6.)


         A complaint must contain “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). The court accepts factual allegations “as true and construe[s] those allegations, and any reasonable inferences that might be drawn from them” in a plaintiff's favor. Gaines v. Stenseng, 292 F.3d 1222, 1224 (10th Cir. 2002). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Nonetheless, conclusory allegations without supporting factual allegations are insufficient to state a claim for relief. See Id. (“Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'”).


         I. Judicial Estoppel

         a. Parties' Arguments

         Defendants argue Plaintiff's claims should be dismissed because the claims belong not to Plaintiff, but to his bankruptcy estate. Further, Defendants suggest the claims should be dismissed on the grounds of judicial estoppel because Plaintiff failed to disclose the present causes of action during his bankruptcy proceeding.

         Plaintiff argues that he and his bankruptcy counsel notified the bankruptcy trustee of the facts Plaintiff then knew about potential claims against Defendant. (ECF No. 14.) Plaintiff does not claim he listed any claims against Defendants in his bankruptcy petition. Plaintiff claims instead that he informed the trustee of the potential claims and thus the trustee has abandoned those claims by not asserting them during the pendency of the bankruptcy action. (Id.)

         b. Defendants' motion to dismiss cannot be granted at this stage of the proceedings.

         Defendants' argument that Plaintiff no longer owns the claim raises questions that cannot be answered from the face of the pleadings. While a debtor's property becomes part of the bankruptcy estate when bankruptcy is filed, the property does not remain there for eternity. The trustee is ordinarily considered to have abandoned property not administered during the pendency of the bankruptcy. See In re Krachun, No. AP 15-2016, 2015 WL 4910241, at *4 (Bankr. D. Utah Aug. 14, 2015) (setting forth process by which trustee may be found to have technically abandoned property not administered during bankruptcy proceedings). On the limited record here, the court cannot determine who owns the claims. Defendants believe this gap in the record mandates dismissal of the Complaint. The court disagrees. Defendants do not show that Plaintiff failed to properly plead his claims. At best, Defendants establish Plaintiff omitted sufficient facts to support Defendants' affirmative defense. Yet Plaintiff need not plead all facts relevant to an affirmative defense to survive a motion to dismiss. See, e.g., Turner & Boisseau, Inc. v. Nationwide Mut. Ins. Co., 944 F.Supp. 842, 847 (D. Kan. 1996) (denying motion to dismiss asserting statute-of-limitations defense where complaint did not set forth accrual date of claim). The court is unsurprised the Complaint omits facts about Plaintiff's bankruptcy proceeding because those facts relate to Defendants' affirmative defense, not Plaintiff's claims.

         Next, the court will not grant dismissal based on Defendants' estoppel argument at this early stage. Defendants rely on Eastman v. Union Pacific to support their estoppel argument. 493 F.3d 1151 (10th Cir. 2007). In Eastman, the Tenth Circuit affirmed a district court's application of judicial estoppel to a post-bankruptcy claim where plaintiff/debtor concealed a cause of action during his bankruptcy proceeding and later sought to pursue that claim in the district court. See Id. at 1153-54, 1160. Yet, in doing so, the Eastman court considered the debtor's testimony from the § 341 meeting of creditors. See at 1153-54. Here, Plaintiff suggests his testimony in his own § 341 meeting of creditors will show he disclosed Mr. Griffee's identity and what Plaintiff then knew about his claims, unlike the Eastman plaintiff. (ECF No. 14.) Defendants ask the court to ignore any questions Plaintiff raises about the bankruptcy proceeding because those questions cannot be answered from the facts alleged in the four corners of the Complaint. As mentioned above, the court does not find Plaintiff's Complaint deficient simply because it omits facts relevant to Defendants' affirmative defense. Defendants' estoppel argument raises questions that cannot be answered without considering further evidence. See Eastman at 1159 (stating that “debtors, who have failed to disclose legal claims to the bankruptcy court without credible evidence of why they did so, have been judicially estopped from pursuing such claims subsequent to discharge”) (emphasis added). Thus, dismissal is not presently warranted.

         Likewise, “it may be appropriate to resist application of judicial estoppel when a party's prior position was based on inadvertence or mistake.” Eastman at 1157 (emphasis original). The Eastman court cited with approval a Sixth Circuit case in which the court upheld a finding of mistake or inadvertence where a debtor omitted a cause of action from his bankruptcy schedule but the debtor later disclosed the claim in correspondence with the trustee. Here, Plaintiff claims to have done something similar. Plaintiff claims his former attorney notified the trustee of potential claims against Defendant. Ultimately, the court makes no comment or ...

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