Kimberly Cox v. Old Republic Nat'l. Title Ins.

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 19, 2018
• Docket: 16-16566
• Status: Unpublished

Opinion

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT NOV 19 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS KIMBERLY COX, No. 16-16566

Plaintiff-Appellant, D.C. No. 5:15-cv-02253-BLF

v. MEMORANDUM* OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY; NEW PENN FINANCIAL, LLC DBA SHELLPOINT MORTGAGE SERVICING; THE BANK OF NEW YORK MELLON CORPORATION AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWMBS INC - CHL MORTGAGE PASS-THROUGH TRUST 2005-02; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Submitted November 13, 2018** San Francisco, California

Before: SCHROEDER and WATFORD, Circuit Judges, and KORMAN,*** District Judge.

Kimberly Cox defaulted on a loan that was secured by a deed on her home in

Santa Cruz. She filed for bankruptcy in 2010, and her debts were discharged in

2012. Defendant creditors and lenders later recorded default notices against Cox’s

home and a notice of trustee sale. Cox filed this lawsuit claiming the underlying

home loan upon which she defaulted was either invalid or had been rescinded in

2007.

The district court concluded that Cox’s unscheduled property-related claims

became part of her bankruptcy estate, and dismissed Cox’s complaint for lack of

standing. The district court also denied Cox’s motion for default and her motion

for sanctions. Cox appeals. We affirm.

When a debtor declares bankruptcy, the debtor’s “legal or equitable

interests” in his or her property becomes part of the bankruptcy estate, to be

represented by the bankruptcy trustee. See 11 U.S.C. § 541(a)(1); see also Turner

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Edward R. Korman, United States District Judge for the Eastern District of New York, sitting by designation. 2 v. Cook, 362 F.3d 1219, 1225-26 (9th Cir. 2004). Legal and equitable interests

include “[c]auses of action.” Turner, 362 F.3d at 1226 (citing Sierra Switchboard

Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 707 (9th Cir. 1986)).

Each of Cox’s causes of action relates to her legal or equitable interest in her

real property. When Cox’s bankruptcy petition was granted, her interest and all

claims that derive from it became part of the bankruptcy estate. See Stein v. United

Artists Corp., 691 F.2d 885, 891 (9th Cir. 1982) (undisclosed property becomes

part of the bankruptcy estate and a debtor cannot “withhold[] from his trustee all

knowledge of certain property”) (quoting First Nat’l Bank v. Lasater, 196 U.S.

115, 119 (1905)). Only the bankruptcy trustee has standing to bring these claims.

The district court correctly dismissed plaintiff’s complaint with prejudice and

granted judgment for defendants.

Because Cox lacked standing to sue, the district court lacked subject-matter

jurisdiction over this lawsuit. See Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174

(9th Cir. 2004). Accordingly, the district court correctly denied Cox’s motion for

default.

Cox sought sanctions because two corporate defendants’ names were spelled

differently on certain filings (“Old Republic Default Management Services”

instead of “Old Republic National Title Insurance”; and “BONY” instead of

3 “BONYMCorp”). This is not the abusive misconduct that Rule 11 was designed to

prevent. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). The

district court did not abuse its discretion when it denied Cox’s motion for Rule 11

sanctions.

On appeal, Cox moves for additional sanctions. Cox has not identified any

sanctionable misconduct. We therefore deny her motions for sanctions.

Cox also filed two requests for judicial notice. Because neither request, if

granted, would change our conclusions above, both requests are denied as moot.

Conclusion

The judgment of the district court is AFFIRMED. The district court’s orders

denying Cox’s motions for default and sanctions are AFFIRMED. Cox’s pending

motions for sanctions and for judicial notice are DENIED.