Annette Leroux v. C.P.A. Insurance Co.
16-55549
| 9th Cir. | Dec 22, 2017Background
- William Ross III filed for bankruptcy in fall 2010; LeRoux is a creditor who later pursued claims arising from an alleged breach of a compensation agreement by CPA Insurance Company in April 2009.
- LeRoux sued multiple parties (CPA, ICON, Rubino, Shear, Eastwood, McKay, Rock) asserting contract, declaratory relief, RICO, fraudulent conveyance, and unjust enrichment claims tied to the 2009 conduct.
- The bankruptcy trustee abandoned and assigned to LeRoux causes of action against CPA only; LeRoux later obtained an assignment referencing rights against CPA "or others."
- The district court dismissed LeRoux’s claims for lack of standing because the asserted claims were part of Ross’s bankruptcy estate (rooted in pre-bankruptcy conduct) and only claims against CPA had been abandoned/assigned.
- LeRoux moved for reconsideration based on a 2015 bankruptcy court nunc pro tunc clarification that purportedly broadened the earlier abandonment to "any and all claims" related to the compensation agreement; the district court denied the motion.
- The Ninth Circuit affirmed, holding the claims belonged to the bankruptcy estate and that abandonment/assignment only covered CPA claims; the nunc pro tunc clarification could not retroactively create standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LeRoux’s claims were part of Ross’s bankruptcy estate (pre-bankruptcy root) | LeRoux contended some claims arose post-bankruptcy and thus were not estate property | Defendants argued all claims were sufficiently rooted in Ross’s pre-bankruptcy conduct (2008–2009) and thus part of the estate | Held: Claims were rooted in pre-bankruptcy conduct and therefore belonged to the estate (citing Segal) |
| Whether abandonment/assignment vested LeRoux with rights against non-CPA defendants | LeRoux argued the trustee’s assignment and wording (including "or others") conveyed rights against other defendants | Defendants argued the abandonment and assignment expressly concerned causes of action against CPA only | Held: Abandonment and assignment covered only CPA causes of action; LeRoux cannot sue other defendants on estate claims |
| Whether the bankruptcy court’s 2015 nunc pro tunc clarification could retroactively create standing | LeRoux argued the nunc pro tunc clarification broadened abandonment and cured standing defects | Defendants argued nunc pro tunc cannot alter historical facts to create jurisdiction; standing is assessed as of the complaint filing | Held: District court did not abuse discretion denying reconsideration; nunc pro tunc could not retroactively create standing or undo historical record |
| Whether LeRoux forfeited arguments about the scope of abandonment | LeRoux raised objections later in briefing | Defendants noted waiver for late arguments | Held: LeRoux waived many abandonment arguments by raising them only in reply; moreover, the record showed abandonment referred to CPA alone |
Key Cases Cited
- Segal v. Rochelle, 382 U.S. 375 (U.S. 1966) (claims "sufficiently rooted in the debtor’s pre-bankruptcy past" belong to the estate)
- Catalano v. C.I.R., 279 F.3d 682 (9th Cir. 2002) (interpretation of abandonment/assignment language and creditor rights)
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (U.S. 1989) (jurisdiction generally depends on facts at time complaint filed)
- Singh v. Mukasey, 533 F.3d 1103 (9th Cir. 2008) (limits on nunc pro tunc power to correct clear mistakes and prevent injustice)
- In re Palmdale Hills Prop., LLC, 654 F.3d 868 (9th Cir. 2011) (standard of review for standing determinations in bankruptcy contexts)